How do i take action against an ifa?

supersimo

Hi,

I invested £11k in the suspended Arch cru funds. I notice one fellow investor has successfully taken his IFA to the Financial Ombudsman Service.

I would like to do the same, but imagine I need someone to help me out - a lawyer maybe? - at the very least someone who knows how to present evidence to the FOS in a proper way.

Please can anyone help me?

Aegis

If you have a complaint you first need to send it to the IFA in question. They then have 8 weeks to make a full response, after which you can make the same complaint to the FOS to see what they say about it.

You don't need a lawyer for any of this. All you need to do is outline exactly what your complaint is and the facts associated with your complaint.

dunstonh

I would like to do the same, but imagine I need someone to help me out - a lawyer maybe?

You dont need a solicitor. The complaints process is free and anyone who was advised to invest in the Arch Cru fund by a small number of IFAs should find it very easy.

The key points are:
1 - if it was recommended as cautious, then it was not.
2 - the fund didnt disclose most of its assets so how could any due diligence and research be made on the fund.

If it was recommended as a medium risk fund (or higher) then its harder to get to a get a complaint upheld. Although if you focused on point 2, you may have some scope.

Also, the complaint would look at the full recommendation and not just that fund. So, if the overall spread of the investments recommended, including this fund. was cautious, then you would be likely to fail as funds from above and below your risk profile can be used providing they average out to match your risk profile.

purch

You can borrow my shotgun if that helps ?? :eek:

metrobus

90% of IFA`s are just salesmen.

Very little qualifications needed to become one
just the ability to !!!!!!!!e and have no morals.

Aegis

metrobus wrote: »

90% of IFA`s are just salesmen.

Very little qualifications needed to become one
just the ability to !!!!!!!!e and have no morals.

Ahh, just what we need. Another IFA basher...

Do you happen to have evidence that contradicts the Financial Ombudsman Service's statistics which show that IFAs account for 4% of complaints within fianncial services despite being pretty much the biggest distribution channel? Or, indeed, anything to back up that extremely negative statement at all?

Rollinghome

Aegis wrote: »

Ahh, just what we need. Another IFA basher.

Aegis while it's very loyal of you to constantly stick up for your industry, it would be nonsense to pretend that everything is fine as it is. After a hard-fought fight against change by many IFAs, the FSA is insisting on an end to current practices for good reasons.

In particular they want an end to the product providers paying IFAs to sell their products and for higher educational standards to be implemented by 2013.

As Martin Lewis says on this site:

The proof that commission impacts advice is that companies deliberately market increased commission rates to IFAs. If advice was never biased, then the rate of commission wouldn't make any difference, yet product providers know that up the commission rate and they're more frequently recommended.

Moneyweek says the same and more: www.moneyweek.com/personal-finance/need-unbiased-advice-youll-be-lucky.aspx

The changes are necessary if there's to be any pretence of unbiased advice. Those IFAs who accept that will do well while the lifelong salesmen without the ability or inclination to change will have to move on to sell something else.

Aegis

Rollinghome wrote: »

Aegis while it's very loyal of you to constantly stick up for your industry, it would be nonsense to pretend that everything is fine as it is. After a hard-fought fight against change by many IFAs, the FSA is insisting on an end to current practices for good reasons.

Client agreed remuneration is already in place. I honestly still don't see that there will be much difference. IFAs who take 3% commission on everything now will instead have a 3% initial charge. The ones most affected by this would have been the banks, but they're pretty much exempt from the RDR.

I'll agree that there are undoubtedly a few bad eggs in the industry, but this new poster in this area has claimed that 90% are just commission-hungry salesmen rather than advisers taking a fee for their services.

FRANKIE_2

I invested £30k in the suspended Arch cru funds. I notice one fellow investor has successfully taken his IFA to the Financial Ombudsman Service. I have been told by my IFA that I would not lose out financially as any shortfall following the sale of assets of this fund will be covered under the FSA Compensation scheme as the limit is £48,000. Does anyone know if this is correct or am I being very naive? Should I complain to my IFA as I too invested in it because it was a sold as a cautious managed investment. My risk profile was low risk.

dunstonh

I have been told by my IFA that I would not lose out financially as any shortfall following the sale of assets of this fund will be covered under the FSA Compensation scheme as the limit is £48,000. Does anyone know if this is correct or am I being very naive?

It is correct and incorrect at the same time.

The FSCS does cover you up to £48,000. However, it does not cover investment returns due to loss of value. So, you are going to be in a loss position that the FSCS will not cover. Not unless the underlying investments suddenly boom in value (there goes another pig.... )

Should I complain to my IFA as I too invested in it because it was a sold as a cautious managed investment. My risk profile was low risk.

You should complain as it was never low risk and should not have been recommended as such.

Rollinghome

Doesn't let the adviser off the hook who should have seen the problem with that fund but the IMA must share the blame I'd have thought.

If a fund like that can be defined as Cautious Managed then there's something wrong with their definition and it needs to tightened up. If their idea of "cautious" doesn't agree with the understanding of the term by the average investor it only gives a false sense of security. Do they intend to review it?