HSBC Cancellation pitfall

KeithBS

dtaylor84 wrote: »

But that is precisely what your post is demanding. The point of the law is to allow you to withdraw from the contract you're entering into, without penalty (i.e. fees, etc.). It is not to protect the capital that you used to purchase a volatile investment (and now want back, up to 14 days later).

What you suggest is not a "cooling off" period, but a mandatory 14-day waiting period before people are allowed to invest in certain products! That is not the intention of the law at all.

I am not campaigning for a new law nor a change in the current law, I only want to be told what the law is. I don't even want anyone's opinion on the applicable law, save as a footnote to a post citing the law as it stands. I'm getting plenty of heat but not much light.

purch

I cancelled because I had second thoughts

...and I want someone else to pay the price of my 1st thought !!!!

Yet another example of why this once proud nation of ours is falling apart.

There must always be someone else to blame, and someone else to pick up the tab !!!!

dunstonh

http://www.fsa.gov.uk/pubs/hb-releases/rel71/rel71cobs.pdf

Chapter 15 of the new conduct of business sourcebook.

15.4.3 covers the shortfall due to market movements.

KeithBS

dunstonh wrote: »

Ooops. Thanked instead of pressing quote!

It will be the conduct of business rules under section 51 of the finance act of 1995. Although it would have been in the old 1988 one as well and I think there were amendments in last years (but they applied to insurance contracts). Ignoring the year of the finance act, it comes under the conduct of business rules from in the FSA handbook

Does the Finance Act of 1995 give legal status to guidance or code of conduct in the FSA handbook and how would a consumer get access to the relevant text in the handbook.

KeithBS

dunstonh wrote: »

http://www.fsa.gov.uk/pubs/hb-releases/rel71/rel71cobs.pdf

Chapter 15 of the new conduct of business sourcebook.

15.4.3 covers the shortfall due to market movements.

I think our posts crossed, many thanks for the link. I'll have a read to see what this is all about.

KeithBS

purch wrote: »

...and I want someone else to pay the price of my 1st thought !!!!

Yet another example of why this once proud nation of ours is falling apart.

There must always be someone else to blame, and someone else to pick up the tab !!!!

Pretty childish response from someone who can't be bothered to read the thread. Nowhere do I blame anyone I merely ask is the law as HSBC say it is (they need not always be right as in the bank charges scandal so famously championed by Martin Lewis) and if that is indeed the law, could it have been intended to be this way?

sabretoothtigger

Yes its intended that way, you bare the risk or gains not them. It applies to all sorts of other offers, you always have to pay for what you use upto the cancel date.

Im pretty sure if markets had risen 10% you'd also get that back despite canceling, unfortunately the market is crap right now


However, on the bright if the market falls further below the point you pulled out then you can gain in your choice by reinvesting into the market at that lower point and capitalising on your decision

If you check out what dithering dad did with his pension, he withdrew his money to cash when the ftse was at 5500. Then put it back in at the lower level, in theory he didnt gain much money but he did avoid the fall and was able to buy more units once reentering the market

If you think of the market like an elastic band, any massive fall puts pressure on the possibility for an equally large rise.
Obviously if the economy is bombing then there is alot of weight against that happening any time soon but even so you will find big gains happen on the way down as the market flexs and adjusts to all the applicable factors.

Maybe a more flexible scheme that lets you switch to cash is best for you..

Alternatively, buying in monthly instead of a lump sum seems far less risky right now imo and alot less worrying


The bottom of the market is likely to be a U turn not a V bounce. Its probably best to be realistic and accept any investment will first fall in value, languish and eventually rise

KeithBS

sabretoothtigger wrote: »

Yes its intended that way, you bare the risk or gains not them. It applies to all sorts of other offers, you always have to pay for what you use upto the cancel date.

Im pretty sure if markets had risen 10% you'd also get that back despite canceling, unfortunately the market is crap right now


However, on the bright if the market falls further below the point you pulled out then you can gain in your choice by reinvesting into the market at that lower point and capitalising on your decision

If you check out what dithering dad did with his pension, he withdrew his money to cash when the ftse was at 5500. Then put it back in at the lower level, in theory he didnt gain much money but he did avoid the fall and was able to buy more units once reentering the market

If you think of the market like an elastic band, any massive fall puts pressure on the possibility for an equally large rise.
Obviously if the economy is bombing then there is alot of weight against that happening any time soon but even so you will find big gains happen on the way down as the market flexs and adjusts to all the applicable factors.

Maybe a more flexible scheme that lets you switch to cash is best for you..

Alternatively, buying in monthly instead of a lump sum seems far less risky right now imo and alot less worrying


The bottom of the market is likely to be a U turn not a V bounce. Its probably best to be realistic and accept any investment will first fall in value, languish and eventually rise

Thanks for the insight. I do get it and was investing for the medium to long term i.e. 3 to 5 years. It's not that I was exercising some right to get out of the market, rather I believed I was exercising a right to change my mind about entering the market.

What I hadn't appreciated was this 'right' just meant the fund managers didn't get there initial management fee and that's it. No other rights at all.

Seems a very small right to be able to exercise, completely dwarfed by the losses for being in the market for 5 days.

slipp_digby

KeithBS wrote: »

It's not that I was exercising some right to get out of the market, rather I believed I was exercising a right to change my mind about entering the market

If you believe this you live in a land of cake with pixies and magic frogs with hats.

YOU were in fact exercising a right to get OUT of the market as at that point in time your were already IN the market. YOU took the choice to enter the market when you bought the unit trusts.

HSBC have made no money out of this transcation at all, and you have lost out from entering the market via lump sum at a time when the stock market has been falling like a stone.

I dont pretend to know your circumstances, but it seems to me you got out when you thought you would make a loss in the short term - perhaps a medium term investment wasn't suitable for you?

I,_Brian

I had a similar misunderstanding come up earlier in the year when I accidentally paid more than I planned into my shares ISA and looked up my position according to the Sale of Goods Act (1979) which has since been amended to the Sale and Supply of Goods to Consumers Regulations (2002).

The bottom line is that purchase of investments such as shares and unit trusts is specifically excluded from any money-back protection, instead the consumer being protected against losses cause by negligence on the part of the supplier

In other words, if you had made a written instruction to buy from Unit Trust X, and HSBC had bought from Unit Trust Y instead, causing a loss, then you would have room to complain.

However, as you paid for long-term investments, the fact that you then withdrew very early means you should have been plainly aware that you would be at risk of a loss.

Something you'll have to chalk down to experience, and next time, plan your investment strategy better, ie, long-term investments held for the long-term.

Simply 2c.