There are warnings from financial advisers that a letter sent by Scottish Life to clients with maturing endowments could lead to endowment claims. The letter explains that Scottish Life is investigating with-profits endowments sold between 1988 and 1995 due to the methods used by advisers to calculate rates.
The letter asks client for a copy of the original illustration of possible policy maturity values provided by their financial adviser “to assist in our investigation of the premium calculation basis adopted by advisers.”
Although the letter appears to suggest there may be room for clients to investigate the possibility of a complaint, Scottish Life were quick to clarify the reason for the letter. A spokesman explained they were trying to identify liabilities arising from allowing endowments to be sold using misleading LAUTRO rates, adding that no responsibility would lie with advisers.
Problems with LAUTRO rates of return quoted prior to 1995 have arisen before although these often concerned issues of charges not included in the LAUTRO rates provided.
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