Obviously firms and advisors should not guarantee what the value of an endowment policy will be when it matures, usually 25 years later. For one thing, some of the endowment's assets are in shares, and their performance certainly cannot be guaranteed.

Claims about endowment performance guarantees

There are two types of claim about alleged guarantees of investment performance. They look similar, but be very careful indeed, because the financial remedies are calculated very differently.

1. Customers claim they were given a guarantee about investment performance.
    
2. Customers claim that what the financial adviser said was too uncertain to amount to a promise, but it was nonetheless misleading - and if they had known the true position they would not have entered into the contract.

Different compensation for these endowment complaints

If complaints like these are successful, redress is worked out differently for the different types.

1. The firm may be required to pay the amount "guaranteed" when the policy matures, if all the payments have been kept up to date.
    
2. For the second type of complaint the award may be
    
   • Voiding the contract, leading to the return of of premiums paid, with interest; or
      
   • Damages. But these are calculated to return customers to the position they would have been in if the misrepresentation had not been made - not the position they would be in if the false statement had been true.

So you can see that the amount awarded may be very different according to the type of complaint.

In the first case the firm has to stick to its promise. In the second case, you are in effect put back to where you started from (plus interest). So be careful!

For more detail read the Ombudsman's guidance about guaranteed investment performance.