is this mis-selling?

Newly_retired

I have just dug out my paperwork re that meeting in 2007 and I can now see that his assessment of DH was identical with mine ie based on my previous conversations with him when I first invested in 2002 - 4.
Our discussions prior to the meeting were done over the phone and he IFA came to the house, twice I think, for signatures to the actual investments agreed.
I can see I should have gone through all this with DH in detail. I know he relied on me as he is not interested in money.

Newly_retired

Sorry , our posts overlapped.
We each have separate investments , of different amounts, but in the same products - NS&I, Pru, Sterling ISA .
I had Sterling ISA and other investments prior to this.
The suitablility report and covering letter was addressed to both of us.
I think you are going to confirm what I now suspect, that DH was not treated separately.
So he cannot complain of mis-selling.
?

jem16

Newly_retired wrote: »

We each have separate investments , of different amounts, but in the same products - NS&I, Pru, Sterling ISA .

Could you clarify how much your husband has in each of these please? This is important as the risk is balanced out over the 3 items, not just the 1.

The suitablility report and covering letter was addressed to both of us.
I think you are going to confirm what I now suspect, that DH was not treated separately.

It sounds more like you were treated as a couple.

So he cannot complain of mis-selling.
?

You say that signatures were requested for the investments agreed. I assume your husband signed that he agreed?

Newly_retired

DH put £10K in NS&I, £10K in Pru (capital guaranteed) and whatever the annual ISA allowance was in 2007, split equally between cash and S&S .
So he invested approx £24K via the IFA which was about half of his lump sum.

For the rest, about £11K was used to pay off the mortgage ( I paid the same), and the rest in cash, some in an ISA, which has gone on various expenses - repay car loan, home improvements and maintenance etc.
At that time I put £8K in NS&I, £20K in Pru and £4K in the S&S ISA. That was the whole of my ( much smaller) lump sum.
All based on IFA's advice.

Newly_retired

Neither of us actually signed the report, it says "by telephone initially"
Obviously we both signed our separate forms for each investment.

jem16

Newly_retired wrote: »

DH put £10K in NS&I, £10K in Pru (capital guaranteed) and whatever the annual ISA allowance was in 2007, split equally between cash and S&S .
So he invested approx £24K via the IFA which was about half of his lump sum.

So if you take that £24k and a loss at the moment of £1500 than that works out at a 6.3% loss over the whole investment which is very little to be honest.

Any complaint would look at the whole investment by your husband and not just one third of it. Perhaps that's what he needs to understand?

Neither of us actually signed the report, it says "by telephone initially"

You wouldn't actually sign the report but having read it you presumably didn't question it with the IFA which would show that you agreed with it.

Newly_retired

So really I think you are saying that morally ( and legally?) I am responsible for not explaining fully to DH what he was commiting to and it would be difficult to make a case for mis-selling.
This is what I was coming to conclude.
Thanks for your input.
Any advice on the actual funds of our ISAs ? Are they still suitable?
The IFA has invited us to ask for our annual review so any opinions would be useful.
Many thanks.

dunstonh

So really I think you are saying that morally ( and legally?) I am responsible for not explaining fully to DH what he was commiting to and it would be difficult to make a case for mis-selling.

There are two things.

1 - the portfolio is a whole and not just one part of it. So, a loss of 6.3% is tiny. Its well within the lowest risk level the FOS would go by. So, even if you dispute risk profile. You cannot really get much lower. You would almost have to say that he wanted no risk at all and that is considered unrealistic for most people. Especially as the funds in the sterling are not specialist and not high risk.

2 - Your OH is a responsible adult.

Any advice on the actual funds of our ISAs ? Are they still suitable?
The IFA has invited us to ask for our annual review so any opinions would be useful.

I would go with the IFA as what has been used so far seems fine.

Newly_retired

OK, that is reassuring.
Thanks for your input.
But you haven't met my DH!!

Stochasticity

Newly_retired wrote: »

DH put £10K in NS&I, £10K in Pru (capital guaranteed) and whatever the annual ISA allowance was in 2007, split equally between cash and S&S .
So he invested approx £24K via the IFA which was about half of his lump sum.

For the rest, about £11K was used to pay off the mortgage ( I paid the same), and the rest in cash, some in an ISA, which has gone on various expenses - repay car loan, home improvements and maintenance etc.

Several things don't quite add up here.

Firstly, the annual ISA allowance in 2007/08 was £7,000, of which up to £3,000 into cash. So there's no way exactly he could have both used his full allowance in September 2007 and split exactly equally between the cash component and the equity component.

If he's used his full £7,000 allowance, that's an investment of £27,000, if he's also put £10,000 into NS&I IL Certificates and £10,000 into a Pru product.

The total returns (i.e. with dividends re-invested), from 27 September 2007 (date chosen as it was pretty much the high watermark for the relevant funds in September 2007) to present day, on the four funds you've listed are as follows:

Invesco Perpetual High Income, +7.48%
Fidelity Wealthbuilder, -3.79%
Jupiter Income, -10.01%
Fidelity European, -18.93%

No combination of the above returns a loss of £1,500 on even a £4,000 investment, even if not all of the income is reinvested with regard to two of the funds, unless there is a real problem with the adviser renumeration as a proportion of the investment (paid by way of fees perhaps?).

And even if they had returned a loss of £1,500, on a portfolio of £27,000, that's an overall loss of just over 5.5%, pretty minor.

However, that's before taking into account any gains whatsoever on any other part of the portfolio. The NS&I IL certificates alone will be showing a gain of at least £2,000, putting his overall portfolio into positive territory even before any consideration at all of the return, if any, on the capital-protected Pru product and the necessarily nominally positive return on the cash component of his ISA investment.

£4,000 allocated to equities out of £27,000 (c15%) is certainly conservative, which is borne out by the fact that the overall portfolio, based on the information provided, is in positive territory despite investing at pretty much the peak of the market, back when the FTSE was near 6,700.