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Missold ISA?

edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings
4 replies 3.6K views
gomez_2gomez_2 Forumite
15 posts
edited 30 November -1 at 1:00AM in ISAs & Tax-free Savings

5 years ago, my mum received some unexpected money to the sum of £2000, and she wanted to put this into an account where she COULDN'T get instant access to it. She just wanted to keep it in an account where it would earn a reasonable amount of interest and tick along for a "rainy day". She was also in a position where she could afford an extra £50 a month to add to her savings.

She has been registered as disabled for many years, does not pay tax, and cannot work - her only form of income is from sickness and mobility benefits.

She met with a financial advisor at a branch of Abbey National who "advised" her that she should put her money into a Maxi-ISA, along with a monthly contribution of £50 for a minimum of 5 years. Within her first 18 months of the ISA, she received a further unexpected £600, which she also put into the ISA, thinking that she was essentially putting her money in a high interest savings account.

However, a few years ago, she could no longer afford to contribute the £50 a month and stopped the contributions. In total, she has put a total of £4800 into the ISA over nearly 4.5 years.

I'm currently in the process of getting my own finances in order (following The Money Diet!) and getting my own (cash mini-) ISA, so I was interested in finding out what kind of ISA my mum had. I was shocked when I found out she'd been sold on a Maxi-ISA, especially as her most recent statement indicates her cash in value is only around £2700!

I am adament that she has been mis-advised by Abbey National and as a result has lost nearly £2100 in 5 years, a massive amount to her seeing as she has no other savings and the money in this ISA represented all the money she had. Infact, seeing as she doesn't pay tax, I'm sure that she should never have even been directed towards any kind of ISA and a high interest savings account would have been more suitable for her.

She is incredibly upset at the thought of losing her money - all she wanted was to know that her savings would be there for her if she needed them and now it looks like she's lost them because of some "financial advisor" at Abbey.

My question is where does she stand on this issue? Does she have any right to complain to Abbey or even the FSA? If so, what kind of help could she expect?

Thanks for your help....


  • Yes she might have a case for mis-sellign in which case they would likely make up the short-fall between what she put in and what the value is now.

    Firstly she needs to write to the financial advisor or the company he represented complaining and then depending on the response, take it up with the FSA.

    Dispicable IFA ! Her £4,800 would now be worth some £6,000 if the IFA had not got his grubby paws on it.
  • dunstonhdunstonh Forumite
    102.8K posts
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker

    Dispicable IFA ! Her £4,800 would now be worth some £6,000 if the IFA had not got his grubby paws on it.

    It was not an IFA. Abbey National have a tied salesforce.

    Plus no IFA would touch an Abbey National Equity ISA. Assuming it was put into the most used IFA fund and ignoring the £50pm, it would have grown to £4887. If you then add on the £50pm you would be looking at another £3960 making £8847 in total.

    She may not have ended up in the most sold IFA fund but I am just posting that for balance. Indeed, many IFAs wouldnt have seen her based on those contributions as the earnings from her wouldnt be high enough especially given her risk profile.

    All that being said, if she was under the impression it was an account rather than an investment product, that is not grounds for complaint. ISAs can have low risk funds in addtion to high risk funds. The fact it has performed badly is not grounds for complaint as a tied advisor is not allowed to recommend a fund. The purchaser chooses the fund(s) from a range that the advisor says matches the risk profile. That is the area that sounds to be the problem. She was not aware of any risk yet was sold a medium to high risk fund (I am assuming it wasnt a low risk fund as you dont see drops like that on high risk funds).

    So the complaint should focus on why was you mum, who has limited capital available, was sold a stockmarket fund when all she wanted was a higher interest rate product.
    I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.
  • Hi guys,

    Thanks for your advice!

    Since I posted my original message, my mum has been in contact with the FSA who said that she seems to have grounds for a case, but she has to take the complaint up directly with Abbey (as expected). So, she feelsa little better now knowing that she may at least have a chance of doing something about the situation.

    Deemy - She understands that if she'd correctly invested the money that she would now have seen a good return from it, but all she was concerned about was her original amount of £4,800, she just didn't want to lose it.

    Dunstonh - Your point is similar to my complaint. I have no problem with a high risk fund performing badly, but she shouldn't have been on that fund in the first place. She says she did not choose any fund, neither was she asked what level of risk she was prepared to take (the word "risk" alone would have triggered alarm bells for her). I don't think she should have even been directed anywhere near an ISA of any kind, all she wanted was a high interest savings account with non-instant access.

    Well thanks again. She's going to persue a complaint against Abbey and see what they say, and if the result isn't appropriate, she's going to follow it up with a complaint registered with the FSA.
  • Abbey have to follow complaints procedure laid down by the FSA anyway... there are strict rules regarding the time a complaint should be responded to and also the course of action should be laid out should the individual not be satisfied with the response...

    If I am correct the complaint must be ...

    acknowledged within 5 business days - (Initial Response)

    within 4 weeks from receipt of complaint - (Holding Letter) If complaint cannot be resolved prior to 4 weeks passing

    within 8 weeks - (Final Holding letter or Response) - Either a final response to the complaint or a reason why the complaint cannot be resolved.
    In addition, they should advise you of your rights regarding referral of your complaint to the Financial Ombudsman Service and provide you with the Financial Ombudsman Services explanatory leaflet.

    The FSA Rules state that they regard a complaint as being resolved when a final response is issued.

    You can also find a complaints guide from the FSA at

    Hope the above is of some use to you.


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