Can i claim back fee paid to financial advisor ?

rahoubsa

Hi, almost 5 years ago we very foolishly paid almost £4,000 to a financial advisor from legal & general as we really needed to get our finances in order. The guy arrived and set up a hell of a lot of premiums for us which surprisingly were all also paid to legal and general, which summed up to £280.00 per month. The guy also recommended we combined our loans & added them on to the mortgage which he set up surprisingly the mortgage was not with legal & general. Not long after we had paid everything we got a letter saying the financial advisor has now left legal & general but not to worry they will honour the contract. We had to renew our mortgage 2 years ago and that was the first we heard from legal and general and I had to contact them for advice.

I feel the premiums he recommended were far too high to be paying out 280 a month and also do not think adding loans to the mortgage was a particularly good idea either. Is there any way I can claim any of the money paid to legal and general back as we feel we have been ripped off right from the very start.

Any advice will be greatly appreciated

John

StuC75

depends what level of cover you were looking for and what was stated in the recommendation they put to you.. assume you were happy with all this at the time? were the loans added in to make it more affordable for you at the time.. were the fees & commisions stated in what you agreed to at the time..

There seems to be a lot of 'back story' to this that you are not divulging - but likely to drip feed into this conversation.

dunstonh

Can i claim back fee paid to financial advisor ?

in 99.9% of cases, no.

Hi, almost 5 years ago we very foolishly paid almost £4,000 to a financial advisor from legal & general as we really needed to get our finances in order.

Did you write a cheque out for £4000 (or whatever it was) or were these commissions paid to the adviser by the product provider?

The guy arrived and set up a hell of a lot of premiums for us which surprisingly were all also paid to legal and general

It would only be surprising if the adviser was an independent. However, if the adviser was a tied agent of L&G then you would expect everything to be L&G. L&G do have a pretty large salesforce out there still. in particular in estate agents and some building societies.

The guy also recommended we combined our loans & added them on to the mortgage which he set up surprisingly the mortgage was not with legal & general.

L&G dont do mortgages.

Not long after we had paid everything we got a letter saying the financial advisor has now left legal & general but not to worry they will honour the contract.

So, clearly it was a tied sales rep of L&G then.

We had to renew our mortgage 2 years ago and that was the first we heard from legal and general and I had to contact them for advice.

L&G took on work for some mortgage brokers. AWD, Carrington etc.

I feel the premiums he recommended were far too high to be paying out 280 a month

As a tied agent of L&G, he can only offer what L&G offer. You would expect them to be more expensive than an IFA. However, if you dont use an IFA you wont get IFA pricing.

and also do not think adding loans to the mortgage was a particularly good idea either

Putting high interest rate loans onto low interest rate mortgages can be a very good idea. It has to come with some caveats in the risk warning messages but the actual transaction itself is very common and normal and can save you money.

Is there any way I can claim any of the money paid to legal and general back as we feel we have been ripped off right from the very start.

Nothing you have said so far indicates any wrongdoing.

Also, all the prices for the insurance were quoted to you before you agreed them. You could have said no. You could have used an independent who would have been cheaper. You did neither. You cant complain years later that you could have got cheaper. It is no difference to finding out a washing machine you bought in Currys could have been bought at a different price elsewhere. You knew the price, you agreed it, you paid it.

rahoubsa

Hi, thanks for the reply. Ok, first off we agreed to the price because it seemed a good idea at the time but the guy who provided the financial advice and then became our financial advisor no longer works for the company therefore he is not our financial advisor therefore offers us no financial advice. Secondly, the premiums he recommended we take out at the time and strongly advised us to do so seem very excessive, ie £280.00 a month, in my eyes not good advise considering we were trying to save money not spend. Thirdly, we had no idea he worked for or on behalf of legal and general until he left the company and legal & general contacted us to advise he had left but it did make perfect sense after that he would recommend all of legal & general products to us which are a hell of a lot more expensive than other options out there at the time and now.

When we renewed our mortgage 2 years ago, we contacted legal & general as we had paid for a life service, why did they not contact us ? After all they are providing us with a service. Also, we were provided a good deal in which we paid £100.00 for a house survey, the survey fell a few thousand shorter than expected, we then had to opt for another deal, & had to pay £100.00 for another survey before we could get the deal we were after. An extra hundred paid unnecessarily through no fault of our own. And this was all purchased through Carrington Carr to begin with.

Thanks

StuC75

you acted only on recommendations, last time I used an advisor they give a list of recommendations and supporting reasons; which also covered whether thay only recommend a single or panel of companies etc.. from which I based MY decision..

Were you at any point 'forced' or told that was the 'only way' to do things.

dunstonh

Ok, first off we agreed to the price because it seemed a good idea at the time but the guy who provided the financial advice and then became our financial advisor no longer works for the company therefore he is not our financial advisor therefore offers us no financial advice.

He never was your financial adviser as such. He was a representative of L&G. L&G were. Also, you almost certainly employed them for advice on a transactional basis. It is very rare for a tied agent to have a servicing contract (Financial advice is not to be mixed up with mortgage advice). IFAs frequently work on servicing basis but FAs do not. You got your advice when you bought the products. There the service ends unless you are paying them a retainer.

Secondly, the premiums he recommended we take out at the time and strongly advised us to do so seem very excessive, ie £280.00 a month, in my eyes not good advise considering we were trying to save money not spend.

There is no such thing as excessive. However, if you felt you didnt want to pay that much then you should have said so at the time. As long as you have a financial need for the policies sold, then the advice is good. Even if the premiums are higher than what you could have paid if you used an IFA.

Also, that comment about trying to save money does also suggset that moving expensive debt onto lower interest rate mortgage was a good thing to do.

Thirdly, we had no idea he worked for or on behalf of legal and general until he left the company and legal & general contacted us to advise he had left but it did make perfect sense after that he would recommend all of legal & general products to us which are a hell of a lot more expensive than other options out there at the time and now.

Tied sales reps frequently try to hide the fact that they are restricted. If you think about it, who would want to use a restricted adviser that costs more than an independent with no restrictions. However, research has shown that over half the people seeing FAs actually thought they were seeing an IFA. So, you are not alone. However, nowhere on any documentation you would have been issued what it say they are independent and it will state that were limited to the services of L&G for insurances and probably whole of market for mortgages. So, whilst I believe what you say, the paperwork wont back you up and paperwork is King.

When we renewed our mortgage 2 years ago, we contacted legal & general as we had paid for a life service, why did they not contact us ?

That life service is a waste of money. It is a flawed pricing model (which is why the company failed and L&G took over). You could complain to L&G about that. There is some scope there to getting it back. Especially if they have failed to contact you.

Also, we were provided a good deal in which we paid £100.00 for a house survey, the survey fell a few thousand shorter than expected, we then had to opt for another deal, & had to pay £100.00 for another survey before we could get the deal we were after. An extra hundred paid unnecessarily through no fault of our own.

its no fault of anyone else either. It is just one of the risks you accept when dealing with mortgages.

And this was all purchased through Carrington Carr to begin with.

I thought it was which is why I mentioned them. You tell a familiar story but apart from the lifetime fee, there is nothing there for you to go after. Just remember in future that when using an adviser, you use an IFA. Not restricted. There is a mandatory disclosure document that verifies that on the first page right at the top. Whilst most of the rest of that document will be small print, that first page will tell you everything you need to know.

magpiecottage

Absolutely the OP should complain about the "lifetime service", and the fact that it was never explained to them that they would have been better off not paying for that service not only because it was useless but because they would have been able to borrow £4,000 less and pay less interest on it over the life of the mortgage. (A ball park figure for £4,000 over 25 years is an overall cost of perhaps £10,000).

The OP should seek a payment of £4,000 plus the interest charged on it, plus interest on that interest, plus any early repayment penalty if that amount is now used to reduce their mortgage.