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Mis-sold investment compensation advice

In April 2010 I invested £100,000 with a supposedly highly regarded investment company. However the performance has never achieved the claims that were made and I have found their administration to be very poor. In July of this year I complained about the advice given, conduct of the sales staff and my dissatisfaction with the company.

There initial response was "go away". But, I was subsequently sent their supporting evidence and it became clear that the financial statement on which they had based their advice did not in any way relate to myself. The information contained therein was either inaccurate or related to another client.

When further contacted and told of this situation they changed their mind and offered my money back and 1.5% compensation.

Does this sound a fair offer?

Any advice would be greatly appreciated

Comments

  • dunstonh
    dunstonh Posts: 117,933 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    Does this sound a fair offer?

    I stuck in a complaint similar to this a couple of years back and the FOS used the interest rate that the account it came from was offering. i.e. if the transaction never happened and the money was in the same account, how much would it have paid?
    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.
  • Meeper
    Meeper Posts: 1,394 Forumite
    I'm afraid you need to provide more information here in order to get a proper response.

    Being dissatisfied with performance is generally no grounds for complaint. A structure being unsuitable for your needs and requirements would be grounds, but not because an appropriate structure has performed poorly. That's the nature of investment risk.

    Now, if this was not explained to you, or you were put into an investment which was not suitable for your circumstances or level of risk, you may have grounds, but it will depend on the documentation held on the advisers' file and what you signed.

    Perhaps you could give us an overview of how the investment came about, what discussions you had with the adviser and what investment was done on your behalf.

    We could then take a look at whether this offer is reasonable. Offering return of capital + 1.5% in the very first instance makes me think that the company knows it's screwed up and is trying to get out of it cheaply.
    I am an Independent Financial Adviser
    You should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • The company have already accepted that errors were made in the sale and administration of this investment. They have accepted that both the advice given and the paperwork connected to it was incorrect. Further they would struggle to dispute my version of events given the inaccuracy of their records. Further, there were issues of serious understatement of charges and overstatement of returns.

    The letter of acknoledgement I have received from them is "without prejudice" and they are offering a total of £2500 in compensation.

    The money was earning 3% in Santander when I took out the investment. So after tax it would have achieved £3600 in the same period.

    But considering these people sell themselves as being "wealth preservers" they should at least beat inflation.
  • dunstonh
    dunstonh Posts: 117,933 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Combo Breaker
    But considering these people sell themselves as being "wealth preservers" they should at least beat inflation.

    You wont get a hypothetical figure. Also, if you are using investment risk as an excuse for complaint and a short term drop is the reason then you wouldnt expect investment return levels of compensation either. You cant have your cake and eat it.

    You should tell them you want 3% to match the account it would have been in had the transaction never taken place. Give them the account type and name so they can verify the interest rate for themselves.
    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.
  • Meeper
    Meeper Posts: 1,394 Forumite
    I concur. Sounds reasonable to me.
    I am an Independent Financial Adviser
    You should note that this site doesn't check my status as an Independent Financial Adviser, so you need to take my word for it. This signature is here as I follow MSE's Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • I never complained to them about the returns. Indeed when I complained in July of this year, the investment was showing it`s highest profit.

    Since that date its value has decreased significantly.

    In the 2 months between my complaint and their offer they sent a man to come and fix the problem. But his solution was to try and sell me some more of their underperforming investments and again massively understate the charges.

    Originally all I wanted was an acknowledgment that things had demonstrably not been dealt with in a professional manner and an agreement to sell the investment without penalty.

    Instead of that they turned it into a sales opportunity and then told me to get lost. So, I am somewhat grumpy with them!
  • But equally I agree that hypothetical figures are no grounds for a basis of compensation.
This discussion has been closed.
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