Grounds for complaint

Listed below are four main grounds for complaint - one or more may apply to you.

Remember, you are complaining about the advice you received when you bought your endowment, not the performance of your policy or the fact you may have a shortfall.

You may want to think about your attitude to risk when you bought the endowment policy before you make a complaint.

1. Was the endowment 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.
• 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 how your endowment would be invested and explain the risks involved.
• The adviser didn't explain that an endowment policy is a long-term commitment that gives a poor return if you cash it in early.
• The adviser didn't check you were comfortable with the risks of stock market investment. The adviser should have explained 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. This may give grounds for complaint if you can prove it (in writing). If you have no proof, still include it in your complaint as it may strengthen your case.

2. The sale didn't follow the rules

Financial regulators set out what should happen when an endowment is sold to you, but some advisers didn't follow all the rules.

These are some of the reasons why the mortgage sale may not have followed the rules:

• The adviser didn't explain any fees and charges and how they affect the return you get on your savings. If you bought your policy before 1 January 1995 you should have been given product particulars including charges and cash-in values for the first five years. After that date, you should have been given a Key Features document detailing fees and charges and their effect over the longer term.
• The adviser didn't complete a fact-find during the sales process.

3. Payments into retirement

If your mortgage and endowment were 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 have grounds to complain.

4. Churning

Any endowment policy you held at the time 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'. Not only is this appalling advice, it's also against the Financial Authority rules and gives you grounds for complaint.