Reclaim Losses

chrisgr1962

Hi,
Mt parents along with my cousin and her husband have a fund which was invested in a medium risk fund (not sure which). My cousin's husband arranged all this with a financial advisor who phoned my parents and asked them to sign a form. It now transpires that the fund lost a lot of money last year and I have only just found out that my parents were not informed of the amount of risk involved in this type of investment. Is there any way that they can claim the losses back from either the Fund or Financial adviser much in the same way that PPI Insurance was miss sold and reclaimed, i.e. my parents were not given all the information they should of been?
Thanks
Chris

Reaper

You can't claim anything for poor performance. I'm sure they were as aware as anyone that investments can both go up and down in value.

The only claim that can be made is if they were sold something unsuitable such as high risk when they said they were looking for low risk. Without knowing the full facts such as their circumstances and what the investment is on the face of it they understood and would have signed a document to say they understood that it was medium risk, so I doubt very much any claim can be made.

dunstonh

It now transpires that the fund lost a lot of money last year

Do you mean last year or the year before? 2008 generally saw big losses but 2009 generally saw big gains

I have only just found out that my parents were not informed of the amount of risk involved in this type of investment.

So how did they buy it? What risk warnings were put on the report, key features document and illustration?

Is there any way that they can claim the losses back from either the Fund or Financial adviser much in the same way that PPI Insurance was miss sold and reclaimed, i.e. my parents were not given all the information they should of been?

You cannot complain about losing money. However, you can complain if the investments sold were not consistent with your risk profile. In an advised case, the adviser would ascertain the risk profile of the individual and document it. Typically this would be through asking a range of questions and an analysis of how much cash savings they have, how long its for and what their objectives are. i.e. Someone investing £20k when they only have £30k is higher risk than someone investing £30k who has £300k.

If you put in a complaint, it will almost certainly burn the bridges with that adviser. So, as you don't know what was said and what was documented its best at this stage for you not to put the complaint in but instead find out what was documented. In the event of a complaint, it is the documentation that is key. And if the adviser has done nothing wrong and is doing a good job, then you dont burn bridges with them.

i.e. my parents were not given all the information they should of been?

As you were not present at the meetings and almost certainly havent seen all the documentation, how do you know that?

chrisgr1962

My cousin's husband sorted it all out (they live in another part of the country and they as well as my parents were tasked (in a Will and by some sort of fund) to look after the money for someone else). The only contact my parents had with the Financial Adviser was a phone call asking them to sign a document and return it. They never and still have not received 'any' paperwork about the investment and cannot get my cousin's husband to send copies over either. There is a bit of a story behind this so at the moment I'm just sounding ideas out to find out what is/has been actually occurring before my parents get involved in some legal/financial problems caused by this investment/fund. Sorry but at the moment I don't have any more info.

Aegis

chrisgr1962 wrote: »

My cousin's husband sorted it all out (they live in another part of the country and they as well as my parents were tasked (in a Will and by some sort of fund) to look after the money for someone else). The only contact my parents had with the Financial Adviser was a phone call asking them to sign a document and return it. They never and still have not received 'any' paperwork about the investment and cannot get my cousin's husband to send copies over either. There is a bit of a story behind this so at the moment I'm just sounding ideas out to find out what is/has been actually occurring before my parents get involved in some legal/financial problems caused by this investment/fund. Sorry but at the moment I don't have any more info.

It sounds like you should be asking the financial adviser nicely to help you work out what's going on at this stage, as you don't know what he has been told the objectives and risk profile for this money are. It appears your parents were joint trustees of this money, and with the information currently available, it sounds like they simply signed a document that they really didn't understand, presumably assuming that your cousin's husband had sorted everything out for them.

As such, you need to contact the financial adviser with your parents and ask exactly what happened during the fact find. Once you have all the necessary information, a complaint may be the next appropriate step, but it may turn out that actually the trustees were supplied with all the necessary information and didn't pass it on to your parents. It could also simply be the case that your parents received all the risk warnings but threw them out, only reading the cover letter and the bit where they had to sign (it happens a lot more than you might think).

chrisgr1962

That's basically what I'm trying to do but they won't even tell my parents who the Financial Advisor (FA) was. They are looking through all their paperwork to see if they have anything and if not the FA went through the Solicitor at the time so hopefully we should be able to find out from them.
Thanks all for the responses.
Chris

dunstonh

They are looking through all their paperwork to see if they have anything and if not the FA went through the Solicitor at the time so hopefully we should be able to find out from them.

For a solicitor to be involved and the way you describe things, it sounds like a trust has been set up. The people responsible for the information would be the trustees and if your parents are not the trustees, that may explain the lack of information. Or if they are the trustees but the registered address is not theirs (i.e. your cousins husband may have his address if he is also a trustee for example) then the information may well have been sent out but not shared.

It could also simply be the case that your parents received all the risk warnings but threw them out, only reading the cover letter and the bit where they had to sign (it happens a lot more than you might think).

Yes, thats frustrating at times but happens often. You spend hours writing a report, binding it and sending it out and when you next visit the person either pulls it out of the draw still in the envelope unread or says they cant find it and then admits to thinking it was junk mail or unimportant and just chucked it out.

That's basically what I'm trying to do but they won't even tell my parents who the Financial Advisor (FA) was.

You mention that the investments lost money. When was the date of the last valuation (as I mentioned 2008 lost money, 2009 saw virtually everything make money. So a loss last year doesnt sound right)?

Also, your parents must have information on the investments and who the provider/platform etc if they know it lost money. So, they could phone the provider and ask them who the servicing FA is and their address.

chrisgr1962

All the information is coming via my cousin any my parents have received absolutely nothing in writing, including statements from anyone. From what they said the form they signed was just a blank piece of paper with there name on. Hopefully once we find out who the FA is we can get more details from them but like I've said, my cousin is not very forthcoming at all with information. I believe the losses were in 2008 and from what my parents have said I think my Cousin is still implying the same thing, i.e. it lost again. For info as I can't find it anywhere, how did medium risk investments do on the whole in 2009 and when were the results published?
Many thanks
Chris

dunstonh

how did medium risk investments do on the whole in 2009 and when were the results published?

You can only generalise without knowing the facts. A medium risk investment portfolio would typically include a mixture of fixed interest securities, equities spread around the world and possibly some property. All of which went up in 2009 and virtually all went down in 2008. Without knowing the investments its impossible to say though.

There are hundreds of thousands of potential investments that could be used and an almost infinite number of variations. The only way to know for fact is to have the statement or a latest valuation.

All the information is coming via my cousin any my parents have received absolutely nothing in writing, including statements from anyone. From what they said the form they signed was just a blank piece of paper with there name on. Hopefully once we find out who the FA is we can get more details from them but like I've said, my cousin is not very forthcoming at all with information.

It does sound like the Cousin is the primary address holder then. However, your parents would have had to sign more than just a blank piece of paper with their name on for their money to be invested, even if in trust.

chrisgr1962

Spoke to my parents earlier and the money was put into Trust with my Cousin and my Parents as Trustees. They now want to get out of it but I can't find out much about the process involved. Does anyone here know and also how does money put into Trust, come out of Trust? I assume there must be some condition that needs to be met, i.e. someone dies or something
Many thanks
Chris

Aegis

chrisgr1962 wrote: »

Spoke to my parents earlier and the money was put into Trust with my Cousin and my Parents as Trustees. They now want to get out of it but I can't find out much about the process involved. Does anyone here know and also how does money put into Trust, come out of Trust? I assume there must be some condition that needs to be met, i.e. someone dies or something
Many thanks
Chris

You'll need to check the trust documents that were put together when it was set up. Those will details exactly how money can be removed from the trust and to whom the proceeds can be paid.