Helping a friend - was her 75 year old mother given wrong advice

pqrdef

lisyloo wrote: »

I would agree, but you still need more than that for mis-selling.

Well as long as they can't be sued for it, that's all right then.

But there's an immediate problem if the customer is looking for advice in her own best interests and the person she's speaking to is just a salesman. Most conversations with bank "advisers" should start with "I'm not the person you should be speaking to" and should end right there.

atush

pqrdef wrote: »

Well as long as they can't be sued for it, that's all right then.

But there's an immediate problem if the customer is looking for advice in her own best interests and the person she's speaking to is just a salesman. Most conversations with bank "advisers" should start with "I'm not the person you should be speaking to" and should end right there.

That is why EVERYONE here recommends you never go to a bank or a tied agent for advice.

If you need advice, go to an IFA.

dubsun

Once again I thank everyone for their input.

To be honest I didnt take the current value into account when thinking the invesment may have been unsuitable, I based it on her complete lack of understanding of the investment, her age, her required term, no alternatives offered, her lack of financial and investment knowledge, and although I was not at the sales meeting, knowing the woman I would have said she was a no risk person. In addition having just lost her husband and sister was also vulnerable and trusted her bank.

When I have seen the Fact Find I will put more details on the Forum, and look forward to everyones comments then.

lisyloo

Well as long as they can't be sued for it, that's all right then.

That's not what I said.
But we don't know what the lady requested.
Perhaps she said she didn't want NS&I we simply don't know.

But there's an immediate problem if the customer is looking for advice in her own best interests and the person she's speaking to is just a salesman. Most conversations with bank "advisers" should start with "I'm not the person you should be speaking to" and should end right there.

Well there are key facts provided.
I would agree you shouldn't go to a saleperson for best advice.
But she did and they can only advise on what's at their disposable and also what she said to them at the time.

If you went to a car salesman would you expect them to tell you not to bother and get the bus? If you went to a window salesmane would you expect them to tell you to "make do and mend".
I agree she went to the wrong place, but that still doesn't mean it would win a mis-selling case.

dunstonh

Once again I thank everyone for their input.

At least the comments are giving you an indication of the issues that may or may not exist and why they may or may not exist.

I based it on her complete lack of understanding of the investment, her age, her required term, no alternatives offered, her lack of financial and investment knowledge, and although I was not at the sales meeting, knowing the woman I would have said she was a no risk person.

Everyone lacks understanding to some degree until they do it. Everyone is a newbie in something until they do it. Most people have little or no investment knowledge. So, the use of investments that suit that sort of person should be used. it doesnt mean they should not use investments. I dont know how my boiler works but I have a boiler. She saw a bank sales rep. She isnt going to be presented with alternatives. It is not their job to do so. So, you cant complain that they didnt do something that is not within their remit to do. You dont visit an audi dealership to be told to buy a BMW.

Ability to understand the risks taken is the key thing. If she was mentally unable to understand the risks then it would almost certainly be a mis-sale. If she understood the risks and went into it then it would not be a mis-sale (for that particular reason - there may be other reasons it may be).

plus, every option has risk. Cash is subject to inflation risk and shortfall risk. Its a case of balancing risk across the different options.

RetiredInThailand

pqrdef wrote: »

This is what worries me. If that was the conventional wisdom of the financial advice industry, which it probably was, this only suggests that the financial advice industry is too far up its own !!!!. Anybody outside the industry applying some ordinary common sense would have thought that some nice index-linked savings certificates would have been more suitable, and they would have been right.

I wouldn't expect anyone in the industry to recommend those as they bring no commission. So no real surprises there.
They are far more likely to recommend funds that charge a whopping initial fee as this fee generally serves to pay the commissions. And indeed it looks like this has happened in this instance also.

Why do people have so much trouble understanding that anyone getting commission is probably only interested in enhancing their own earnings?

dunstonh

I wouldn't expect anyone in the industry to recommend those as they bring no commission. So no real surprises there.

If you dont expect anyone in the industry to recommend them then how do you explain the millions placed their each year by IFAs or the fact NS&I has an IFA site and markets via IFAs as well?

lisyloo

I wouldn't expect anyone in the industry to recommend those as they bring no commission. So no real surprises there.

You seem very cynical which may reflect your actual experiences.
I've certainly met financial advisors who talked about ISAs and high st products.

Why do people have so much trouble understanding that anyone getting commission is probably only interested in enhancing their own earnings?

Of course people want to be paid.

But honestly if you wanted to consider you transport options - bus, cycling or car, would you go to an AUDI dealer for advice?
You wouldn't think there was anything wrong with an AUDI dealer wanting to sell you an AUDI would you. Neither would you think it's morally wrong they get comission on the sale even if it appears rather high (remember they have a lot of tyre kickers too and so do FAs).
It's not morally wrong.
The mistake the lady made was going to wrong place and expecting advice that was genuinely in her best interests but old people can be too trusting.
This does NOT make any of it mis-selling.
BTW - I do not work in finance at all.

But your views are quite cynical. Some financial advisors are good and will give advice in the clients best interest. However you have to go for an independent one for that (IFA) not one that's tied to certain products who cannot advise you properly.
I'm genuinely sorry your experiences have made you so cynical but it doesn't reflect the good experiences that others have had.

Perhaps you went to the wrong advisors too.
That doesn't make it THEIR fault, just as if you went to an Audi dealer it wouldn't be their fault if they tried to sell you an Audi when actually a bicycle would have been a better bet.

atush

I agree. I don't work in finance, but I get pretty tired at all the IFA bashing here, esp as many don't know the difference (nor point it out if they do) between tied bank FAs and IFAs.

darkpool

lisyloo wrote: »

But your views are quite cynical. Some financial advisors are good and will give advice in the clients best interest. However you have to go for an independent one for that (IFA) not one that's tied to certain products who cannot advise you properly.
I'm genuinely sorry your experiences have made you so cynical but it doesn't reflect the good experiences that others have had.

i agree with what you say that there are good and bad advisers. but why do you say that IFAs aren't tied to certain products? we all know IFAs don't advise on direct share holdings or property etc. they only advise on packaged financial products.