What recourse is there now?

savvygirl_2 · 15 March 2007 at 1:45PM

In 2001, on the recommendation of a Royal Bank of Scotland financial advisor, I invested £60,000 in a Guaranteed Capital Bond. Five years later this matured to £60,308.26 - and this includes a £300 'early investor' bonus. I have complained to the Bank, to Royal Scottish Assurance, and even taken it to the Financial Ombudsman, who says there is nothing he can do. I'm beyond disgusted with this and feel other people ought to be warned.

cheerfulcat · 15 March 2007 at 1:57PM

Sorry, but what is your complaint? You got your capital back, as promised.

Cannon_Fodder · 15 March 2007 at 2:25PM

Unfortunately, you picked the early days of the last long crash to start the Bond, so you spent 2 years losing money, then the next 3 getting it back close to where you started.

I speak from personal experience having made the same mistake myself, but in 2000 when it was higher so fell further, when I hadn't done my homework properly.

Probably a poor choice of fund, a FTSE tracker or similar?

If started early in 2003, you'd have a much different end result, but even then high basic charges of the Bank and the extra charges for protecting your capital would have made it less than you could have achieved DIY.

BUT, you did have protection. Swings and roundabouts.

Never use Bank staff for Investment "advice".

savvygirl_2 · 15 March 2007 at 2:31PM

Thanks for helping me make sense of this. Determined never to be shafted like that again.

cheerfulcat · 15 March 2007 at 2:52PM

But you weren't " shafted ". You bought a product which promised a percentage of the difference in levels of an index/indices between two specific dates - probably with the level at the end taken as an average of the final six or twelve months - and a minimum of your capital back. The level at the end was no higher than at the start, so all you got back was your capital.

I suspect that the reason that your complaint was turned down is that you weren't actually sold an unsuitable product, just a lousy one.

dunstonh · 15 March 2007 at 4:19PM

As already mentioned, you havent been shafted. Your timing was !!!!!! (with hindsight) and you bought a poor quality product. That isnt the fault of the adviser either. Bank advisers have limited product ranges and are not investment specialists. Guaranteed Equity Bonds are lousy but banks like them (as they make them lots of money).

Never seek financial advise from a bank.

EdInvestor · 15 March 2007 at 4:33PM

Could savvygirl say what she thinks her return ought to have been, and why?

holloholloway · 15 March 2007 at 4:41PM

like he said never seek financial advice from a bank. I did and i lost money too. With hindsight i was stupid. Whenever i go to the bank and they ask me if i want financial advice i get very angry. Never again.

jamesd · 15 March 2007 at 6:42PM

savvygirl, I'd say that you were lucky. The guarantee protected your capital during a substantial market drop - it may have been the ideal product type for you. Someone who had done the same thing a year earlier would probably have had to rely on the guarantee just to get their full initial money back.

Whether the investment did well or not is another question, but in getting your full initial money back you haven't been so badly served.

oldfella · 15 March 2007 at 6:59PM

Unfortunately, you picked the early days of the last long crash to start the Bond, so you spent 2 years losing money, then the next 3 getting it back close to where you started.

depends on the investment, there are many funds showing v substantial growth over the same period

savvygirl_2 · 16 March 2007 at 12:20AM

Thanks to everyone. I realise it could have been much worse. But I was hoping for some sort of modest return. However, I now have to make up for lost time, interest-wise. Anyone with any bright ideas where to invest £60K (currently parked with Icesave). (not so) Savvygirl

What recourse is there now?

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