investment

barrwall

hi there, anyone got info.
i put £10.000 into a investment fund for mortgage repayment purposes through a private financial company 4 years back. the original guy told me i would get back what i put in at worst or it could more than double.the investment was put into freinds provident 100 % property fund. i got yearly statements from freinds provident but heard nothing from the financial adviser untill two weeks ago and he advised us to put it into scottish widows so thinking he was right said yes but when papers came from scotish widows the return from freinds provident was only £7,562.20.
and reading the scottish widows papers the return was going to be les than if put into an isa.so have asked for money to be returned.
i have phoned the FSA but am awating there call back.
does anyone think i have been wrongley advised

dunstonh

the original guy told me i would get back what i put in at worst or it could more than double.the investment

Have you got that in writing anywhere?

the investment was put into freinds provident 100 % property fund.

Thats poor quality investing. 100% into a single area is old fashioned and always results in lower returns over the long run.

i got yearly statements from freinds provident but heard nothing from the financial adviser untill two weeks ago and he advised us to put it into scottish widows so thinking he was right said yes but when papers came from scotish widows the return from freinds provident was only £7,562.20.

He is churning and that is going to be bad advice. Especially when you consider that the pricing on the FP investment bond (I'm assuming investment bond due to provider) is actually better than Scot Wid.

i have phoned the FSA but am awating there call back.

The FSA dont handle individual consumer complaints.

does anyone think i have been wrongley advised

Based on the limited information posted, then it looks like a number of errors and mis-sale.

1 - Why was £10k put in an investment bond (again assumption on my part - can you confirm)? - why not ISA for 7k and UT for 3k?
2 - Why was 100% put into a property fund? (not something that is likely to succeed in a complaint if it was the only reason but it highlights a consistent level of incompetence. Unless you had other investments which has no property exposure and this chunk was to address that).
3 - Why were you told there were capital guarantees when there were not? (evidence is important here - what do you have that shows guarantees as anyone can claim what you claim after the event)
4 - Why are you being told to churn the investment provider from FP to Scot Wid when you will be incurring charges for doing so and FP offer a range of funds and the annual managment charges are likely to be lower than Scot Wid?

Point 4 is probably the worst thing in that list but probably the easiest to prove as a mis-sale. Churning when there is good reason is perfectly justifiable. Newer contract with lower charges for example gives you a benefit so can be justified. Or taking £7200 a year out of the bond to put into an ISA (bond is subject to tax, ISA isnt - lower tax = better return so justified). So, what was the justification for coming out of the FP product to go into the SW product and you suffering an exit penalty as well and incur establishment charges that you would not have on the SW product.

barrwall

Thanks for replying dunstonh.
as money goes im prety thick.
i put my trust in this financial advisor.yes the 10k was put into a 100% property fund in the form of 20 bonds on his advice because it would give best returns.i have nothing in writing as proof.
churning,am i to understand this is a term used in the financial world for moving money for personal gain on the advisors behalf.
so yet again trusted him on the advice to move to scottish widows.
there was no mention of fees and again nothing in writing.
guess iv been a bloody mug.
these people should not be aloud to get away with it.

dunstonh

guess iv been a bloody mug.

Yes. But you can have the last laugh

these people should not be aloud to get away with it.

You have consumer protection and a complaint well worded can crucify this adviser. Especially if he is with a network as chances are they will want to look at a sample of other clients he has done similar transactions on and if it is a trend, he could end up having to pay out a lot of money for redress. He could also be deauthorised and the FSA may take an interest depending on how much he did. Indeed, in todays financial press there is a report of one that the FSA have banned for something not a million miles away from what yours did.

You should put in a formal complaint. This should go to the adviser's principle if he is with a network. You can verify this via the fsa website http://www.fsa.gov.uk/register/home.do

Type in his firm name and it should show that firm (or a list of potential near matches if not 100% match). When the firm details are shown, if it says under current status "appointed representative" then this will mean he is either a network member IFA or a multi-tied adviser. Select the principles link and that will tell you the company in charge of compliance for this firm. Select the link showing the firm name and that should take you to a page that gives you that firms address. That is who you write to.

The complaint doesnt have to be war and peace. A short letter with bullet points for each area of issue you have is fine. A summary of what you have put here is all you need to do along with the bits I have mentioned.

To summarise the points
1 - Why was a bond recommended when a unit trust would have been better (due to lower taxation)? (note: ISAs didnt allow property 4 years ago)
2 - Why were you told it was guaranteed when it wasnt?
3 - Why was invested 100% into one fund in a niche area and not a spread of funds?
4 - Why were you more recently told to surrender the FP bond and go into a new bond with SW and incur new charges for doing so which could have been avoided if left where it was?
5 - Why havent you received anything in writing confirming why you should have done this transaction?

You should also state that as you believe you have been mislead and given bad advice that you want your £10k returned plus interest.