HBOS poor advice from advisor?

cwb07

Mis sold products by financial advisor.???

Around a year and half ago my retired mother inherited £70k from her Mothers estate and arranged for a “financial review “with an advisor from HBOS, her bank of 30 years, without consulting anyone else. She deposited the £70k and took the advice given.

She was advised to put £50K in an 5 year cautious/ medium risk managed fund ( she has never invested in stocks and shares in her life and financially naive) with St Andrews Life Insurance( owned by Halifax). It promptly lost £10k in the first year. My mother has never had this kind of money before , she rents a council house and has no other capital, other than this inheritance. She had stated on paper to the advisor that she wanted money for her children to inherit on her death. Was this type of investment advice appropriate? She told my mother she directly got her target, and therefore bonus, with this investment! (The fund was on the slide at this time I have learned)

Further more the advisor put £17k in a (book) savings account paying less than 2% (this was a year and half ago remember)and toped up an existing (book) ISA to £9K which again, was paying only around 2%, she also upgraded her current account to a premium account costing £12 a month, no benefits could be used by my mother and ,unlike what she was told, did not pay for itself with the interest.

She was supposed to get a 6 month review of the investments ,but was cancelled by said advisor and never re scheduled. I found out about these investment over a year on and swiftly went down the bank to sort it out? There has been lot more issues but I don’t want to go on. Does she have a case to complain about the advisor and seek some sort of compensation.?

PS Is it acceptable for myself to complain on her behalf and state this in the letter , as my mother is not capable of this.

dunstonh

Does she have a case to complain about the advisor and seek some sort of compensation.?

I dont see anything that she can complain about here.

1 - Its a tied agent. So, you shouldnt expect anything other than HBOS products to be sold.
2 - If she was investing for the long term (to benefit her children) then investing makes sense. Halifax dont have the best product for this but they only have to give advice from their product range and not give best product from whole of market.
3 - the remuneration of the sales rep is not an issue. Your mother agreed to buy a product and the rep got paid for selling it.
4 - tied sales reps are usually transactional. In other words they sell products and will see you if you want seeing but wont necessarily be pro-active (unless they want you to buy more). They are not paid to service you in the same way servicing advisers are.

PS Is it acceptable for myself to complain on her behalf and state this in the letter , as my mother is not capable of this.

They will want evidence she is not capable of understanding. If this is the case and a doctor confirms it then there is grounds for complaint on that point.

If she is capable of handling her own affairs and you are going to put a complaint in then they will accept it from you but they will not respond to your without your mothers permission. They will also question how you can complain when you were not present on the meetings.

Stavros_3

You have my absolute sympathy. This is the bit in your post that worried me "financial review “with an advisor from HBOS". Its always easy with hindsight but the mistake if I can call it that is going with a banks advisor, as they don't have the experience or scope to advise on a wider range of products. Did the 'advisor' do risk evaluation with your mother?. I ask because all F.A's to my knowledge do one with clients before going ahead with an investment strategy. I went into a large investment portfolio last December and my IFA did an evaluation/questionaire with myself and my wife, this is a method that F.A's can truly assess what our exposure to risk is. If he didn't then that would be of concern to me especially as advising a retired lady to go for a medium risk strategy with the majority of the capital, she has taken a (14.5% loss) but remember at this stage its just a paper loss until the investment is cashed in. For what its worth I would personally find a 'reputable' Independent Financial advisor, to do an evaluation of your mothers investments, an Independent Financial advisor is someone who is not tied in with a bank selling poor performing investments.
We have a couple of IFA's on here who may speak about the complaints angle as I wouldn't know where to start. Below is where you can find an IFA in your area. Good luck
http://www.unbiased.co.uk/find-an-independent-financial-adviser/

dunstonh

I ask because all F.A's to my knowledge do one with clients before going ahead with an investment strategy

This is a mandatory with IFAs and tied agents. It doesnt mean its always done correctly or interpretations match though. However, if it is, then its near impossible to claim anything was done wrong. Although equally, if done badly then its fairly easy to claim it was done wrong.

The whole of market options could have been far better for her. For example, allowing her to invest with fluctuations but with a death guarantee or one that has a lock-in at various points. Halifax just dont have these sort of things but they dont need to point it out either.