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Compensation free-for-all

At the end of a meeting to discuss a new remortgage and existing endowments, I asked a client what had brought about her complaint regarding the endowment advice as her policies were on target and she has been happy with our advice in the past, as confirmed in her complaint letter. This is the client&#39s response.

A colleague at work told her that there was an endowment compensation fund and that he had just received £12,000

The colleague gave her a copy of letter he had used and encouraged her to complain She thought, well if there is a fund for this, why shouldn&#39t I claim and sent the letter of complaint to us.

I asked her if she was aware of the risk that the endowment maturity was not guaranteed and depended on future investment performance and she said she was but “you don&#39t really think about that, do you?”

I asked if she had thought about the complaint in terms of who and what she was claiming about and she said she was not complaining about the advice we had given her as she had always been happy with that, feeling we had always advised her well and she had been ahead of the game on mortgage advice and she had made that clear in her letter.

I asked if she had any information about her colleague&#39s adviser and she said she thought he was on his own. I ventured that perhaps he was no longer trading and the fund referred to is the Financial Services Compensation Scheme set up for clients of firms no longer trading and funded by a levy on every firm in the industry.

I explained that, far from there being a fund to meet claims, we would have had to pay compensation if her claim was upheld.

As the client is a professional person, I asked her how she would feel if a member of the public made a complaint about her, questioning her professional competence and setting in motion an investigation

The client apologised and said she had not realised as she just thought that there was a fund that she was entitled to claim against.

BMG Williams

Partner,

The Donnellsons Partnership

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