There are 4 basic circumstances under which you can make a claim for endowment compensation
1. The
endowment was not suitable for you.
Your adviser should have made sure an endowment was the best way of repaying
your mortgage depending on your financial circumstances at the time and your
'attitude to risk'.
These
are some of the reasons why the mortgage may not have been suitable for
you:
Other options for repaying the mortgage were not discussed fully with you;
The adviser didn't explain the investment risks in endowments;
The adviser didn't explain that an endowment policy gives a poor return if
you cash it in early
The adviser didn't check you were comfortable with the risks that the amount
you would get back depended on the performance of the policy;
The adviser may have said the policy was guaranteed or would definitely pay
off the mortgage.
2. The
sale didn't follow the rules:
Some advisers didn't follow all the rules and here are some reasons why they
may have failed you.
The adviser didn't explain any fees and charges and how they affect the return
you get on your savings
The adviser didn't complete a fact find during the sales process.
3. Payments into Retirement
If your mortgage and endowment was set up to continue past your expected retirement
age, your adviser should have checked that you would have enough income in
retirement to continue to pay the mortgage and endowment premiums. If this
wasn't discussed or you were told not to worry because the endowment would
pay off the mortgage before retirement you should be able to claim compensation.
4. Churning
Any endowment policy you held at the time of your mortgage was recommended
to you should have been used to back your loan. Any advisor who told you to
cash in the endowment, and then sold you another one to replace it, was guilty
of 'churning'. This is appalling advice and against FSA rules and you should
be able to claim compensation.
