Mis sold isa to pensioner

topsy22_2

Can anyone please advise. My dad retired at 65, 10 yrs ago (yr 2000) with a lump sum of 18k. He had no private pension or savings. He was recently widowed. He turned to a high st building society for advice. They invested his money into 3 funds (isa investor, 3k: investment bond, 10k & bonus bond 5k=all linked to life assurance even though he has no dependents and owns his own home) Although he has received 5k interest over the 10 yrs his original investment of 18k is now only worth £11,944. This appears blatent mis-selling and worse still a voilation of a vulnerable man. I have seen a branch manager with him today who has promised to 'sort it'. Can anyone tell me what his investment should have been worth had he been correctly advised. Many thanks, Topsy.

atush

that is complex as it will involve finding out the best available savings rates for each year, then doing the caluations and adding up.

Wati and see what the Manager offers, then if you aren't satified ask for hwo they came to the figure. Still not happy, file a complaint for mis selling.

opinions4u

topsy22 wrote: »

Can anyone please advise. My dad retired at 65, 10 yrs ago (yr 2000) with a lump sum of 18k. He had no private pension or savings. He was recently widowed. He turned to a high st building society for advice. They invested his money into 3 funds (isa investor, 3k: investment bond, 10k & bonus bond 5k=all linked to life assurance even though he has no dependents and owns his own home) Although he has received 5k interest over the 10 yrs his original investment of 18k is now only worth £11,944. This appears blatent mis-selling and worse still a voilation of a vulnerable man. I have seen a branch manager with him today who has promised to 'sort it'. Can anyone tell me what his investment should have been worth had he been correctly advised. Many thanks, Topsy.

Poor investment performance is not mis-selling.

Selling products with an element of life assurance may or may not be mis-selling. It may be taking advantage of a tax wrapper.

Selling products with an inappropriate risk profile is mis-selling. Don't forget the FTSE has fallen from around 7,000 in the year 2000 to just under 6,000 at close of play tonight.

Selling products to somebody who is over 60 is not mis-selling.

Selling products to a widower is not mis-selling.

So why do you think he's been mis-sold to?

(I would strongly suggest not buying investments from a bank or building society, but using an IFA instead. Lower charges and a better range of products - although that's not a guarantee of better investment performance you are more likely to get that too!)

Loughton_Monkey

This is by no means 'blatant' mis-selling.

Going to a bank for 'advice' does, however, generally mean several things:

1. They will only 'advise' on a very limited range of products. That's not mis-selling and it's perfectly legal. [An IFA will shop around with several providers].

2. The products they sell are typically very much at the higher end of charges, and hence - all other things being equal - their products will perform much worse than similar ones with more competitive providers.

3. He seems to have dissapointing 'performance' [although the stock markets have not performed well over the last 10 years]. Poor performance in no grounds for mis-selling.

For you to assert mis-selling with any chance of success, you (he) will have to prove that what he was sold did not adequately reflect his needs and risk profile at the time. They will doubtless have paperwork - with signatures - which 'prove' very much that he was sold exactly the 'right' sort of investments..... although with banks, you never know.

dunstonh

This appears blatent mis-selling and worse still a voilation of a vulnerable man.

I cannot see anything at all in the information supplied that makes it look like mis-selling.

A lack of understanding on your part perhaps and it could be mis-sold but nothing you have said suggests it was.

topsy22_2

Thanks 4 taking the time to comment The issue of whether the isa was missold is not in question. The bank have already admitted this & are working with us to rectify it. What I really wanted to know if it is at all possible was what could my dad have expected to have recieved if his money had been put in a high rate saving account. Thanks.

dunstonh

The bank have already admitted this & are working with us to rectify it

So, you have had the letter from their complaints team acknowledging the complaint and agreeing that it was mis-sold?

You said in the first post you had a branch manager agree to sort it. However, that isnt the same thing as having a complaint upheld.

What I really wanted to know if it is at all possible was what could my dad have expected to have recieved if his money had been put in a high rate saving account. Thanks.

He would probably have lost money on that option as well as the level of withdrawal was probably 5% net. 5% net would not have been sustainable on a savings account in that period. So, its probably a smaller difference with interest added to the redress.

StevieJ

opinions4u wrote: »

Poor investment performance is not mis-selling.

Selling products with an element of life assurance may or may not be mis-selling. It may be taking advantage of a tax wrapper.

Selling products with an inappropriate risk profile is mis-selling. Don't forget the FTSE has fallen from around 7,000 in the year 2000 to just under 6,000 at close of play tonight.

What about the dividends?

JamesU

topsy22 wrote: »

What I really wanted to know if it is at all possible was what could my dad have expected to have recieved if his money had been put in a high rate saving account. Thanks.

Regarding the cash value in today's terms, I can give a rough and ready idea based on a fixed amount of non-ISA cash switched between various accounts from 1999 to date. The accounts used were not the highest interest rate accounts available at any given time though, just a compromise between best rates and easy access in an emergency.

Your £18K with compounded interest from 2000 onwards would have increased to around £27K today (assuming a 20% tax deduction on interest). If you take off the £5K received, that would leave £22K, but the current value is £12K, so a £10K shortfall between investing and saving. Obviously cannot comment on the mis-selling and investing side of things, but these are genuine ball-park figures for saving over the 10 year period which I know are realisitic.

JamesU

DrSyn

As points of interest

1. What is the name of this bank or building society?

2. Did they do a fact find with him before they sold him these products & find his attitude to risk?

3. Was it clearly explained to him he could lose some money these products?

4. Have they stated why they thought these products where suitable for him at that time?

5. Have they told you how much money ( if any) was generated for the bank at the time they sold him these products and since (if any)?

[Deleted User]

why do you say he was vulnerable at 65? Did he not have all his faculties when he went down this path? You cannot turn the clock back op, it was his choice at the time