From: philwhite100@hotmail.com (Phil W)
Newsgroups: uk.finance
Subject: Advice on endowment mis-selling
Date: 22 Nov 2004 04:30:14 -0800
Hi
I am seeking some further advice on how I should progress with my
compensation claim in respect of my endowment mortgages that I was
mis-sold.
I have been following the advice given on the Which endowment action
web site and this has been extremely useful. I have followed the
complaint procedure and used the letter generator for assistance.
However, I need some further advice on how I can proceed with getting
compensation. Both the FSCS and my endowment provider Royal & Sun
Alliance seem unwilling to help.
A finacial adviser sold me three Royal & Sun Alliance Life endowment
policies, which commenced on the following dates: -
12.4.1988 - target amount £20000
11.5.1989 - target amount £9,000
29.11.1991- target amount £5,000
In July and December 2000 I received individual letters from Royal &
Sun Alliance regarding each policy stating that their was a high risk
that the policies would not pay out enough.
I received revised figures in February, May and July 2003 to confirm
there was a high risk that all three policies would not pay out
enough.
The firm that the the adviser worked for is is no longer trading and
are listed as being declared in default' according to the FSCS
(Financial Service Compensation Scheme) web site. However, at the time
of writing my complaint letters (December 2002), the financial adviser
who sold me the three Endowment Policies was now working for a
different firm. I have checked his current status using the FSA web
site and he finished working with an end date 4th October 2004. He is
not listed as joining any other financial companies and I presume he
has now retired.
As the company that originally sold my endowments are no longer
trading, I have taken my complaint to the FSCS and to Royal & Sun
Alliance.
In the letters to both organisations I provided the following.
The reasons I am complaining are as follows:
The endowment was not suitable for me
Other options for repaying the mortgage were not discussed fully
with me
The adviser did not explain there was a risk the endowment would not
meet the target amount
The adviser did not properly establish my attitude to risk
The adviser said the policy would definitely pay off the mortgage
And the adviser said there would be a lump sum in addition at the
end of the term
The response I received from Royal & Sun Alliance in February 2003 was
in summary: -
They were not involved with the advice given and so are not in a
position to comment on the suitability of the policies purchased.
Likewise, they are unable to comment upon whether or not I was
properly advised.
They state that they were merely acting as product provider and
carried out my agent's instructions to effect the policies requested.
They suggested that I referred my concerns to the firm that sold the
polices (they clearly didn't read my letter properly as I stated that
the firm is no longer trading) and if this was not satisfactory the
Financial Ombudsman Service. Once again they seem to have misread my
letter. I am unable to complain to the Financial Ombudsman, as the
firm is no longer trading.
The response I received from the FSCS in February 2003 was in summary:
-
I would need to provide documentary evidence to support the fact
that the financial adviser did not properly explain the stock market
risk of my policies.
They are unable to compensate for my first policy as this was sold
prior to 28th August 1988.
They will consider claims where a policy was not suitable for an
investors needs at the time it was sold to them, however the fact that
my policy has performed poorly due to poor stock market returns does
not mean that the policy was not necessarily an unsuitable product.
They cannot compensate if a product that was suitable at the time it
was sold, subsequently experiences lower market returns than were
hoped for.
I have not taken any further action since February 2003 and I have
been monitoring the ongoing campaign that Which Consumer Association
has been running to see if any further developments arise. I recently
spoke to my current financial advise and he has advised that I now
surrender my polices or sell them to a company that specializes in
trading endowments. However, he has also advised that I continue to
seek compensation for the mis-selling.
Can anybody please provide me with advice on how I should proceed and
possibly answer any of the following questions: -
1. The FSCS stated in their reply that I would need to provide
documentary evidence to support the fact that the adviser didn't
properly explain the stock market risk of my policies. However, I have
no such documentary evidence. Shouldn't the financial adviser have
filled out a detailed fact find on each occasion the policies were
sold and should therefore have evidence of these? Will I be able to
get copies of these fact finds if the adviser and firm are no longer
trading?
2. I see from the endowment action web site that a press release dated
27th March 2003 could possibly be good news for any complaint against
Royal & Sun Alliance. The FSA fined them £950,000 over the mis-selling
of endowments between January 1997 July 1999. In, light of this
decision, does this indicate that older policies such as my own should
also be considered. What action would you advice that I take? as in
my previous response from Royal & Sun Alliance they seem to push the
blame onto the firm that sold the endowments and state that they were
merely acting as product provider and acting on their agents request.
3. Can I claim against the individual financial adviser who sold the
three polices? I accept that he is no longer working as a financial
adviser and I assume he is now retired. However he was still working
as an adviser when I originally began my complaints in December 2002.
I would appreciate any help you could provide on this matter.
Many thanks in advance
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