Advice needed urently please

dunstonh

Sorry, could you elucidate please - are you saying that the Ombudsman's decision is not based purely on whether or not an actual financial loss has occurred? I am asking for this clarification because my last claim with the UK ombudsman did not go in my favour, apparently precisely because in their opinion I had not suffered a direct financial loss. For this reason they said that they were unable to proceed with the claim...

If the advice is shown to be wrong then the FOS will frequently recommend a comparison with the existing arrangement prior to investment. i.e. to put you back in the position you would have been. So, someone with nil gain but no capital loss and was badly advised could find an award of interest for the period in question.

However, a loss is not a sign of bad advice. If the loss was always a possible outcome and you were aware of the risks and had the capacity to afford the risks then you would not succeed solely on the basis of a loss occurring or the potential gain not happening or not in levels of what you hoped.

Expectations, standards and regulation change almost constantly. So, the decisions can be quite fluid. For example, before 2007, there was less emphasis on ability to understand than there is today. So, a decision on a old case could be different to a more recent case.

dunstonh

it is ludicrous that there should be zero return - how is it that this is permitted?

It is not ludicrous. A structured product for example can result in a zero return. However, the reason a zero return is likely to exist is because a loss occurred and there was a degree or capital protection which at least returned your investment and avoided the loss.

EdGasket

" To give you a feel for what is possible £40K invested in shares or share funds could moderately safely give you a long term income of perhaps £1600/year which will tend to rise with inflation over the long term."
....or halve in value at the next crisis. 4% return is mederate I grant you but there are no guarantees. I have had much more than £40K invested in a mixture of bonds, funds, and shares over the past three years and am showing a loss!

Jegersmart

truth57 wrote: »

Apparently there was both a fall and rise in the value of the investment above the threshold for these 'trigger events'. That is all I was told. Apparently the investment had risen in value by over 40% during the final month, which triggered the event so that no interest was now payable. That is my understanding of the situation.

Once I receive a full explanation in writing I will post it here.

It would seem imperative to me to a) look at the original documentation and find what the trigger events would be, and then b) gain clearly documented proof that these occurred. I would not accept written confirmation from them only, but verify these independently/yourself.

Good luck.

J

Linton

truth57 wrote: »

The £1600 per annum sounds a lot better than the current 1% the bank is now paying me in the International Bonus Saver account! But what access does such an investment provide to the funds, surely it would mean selling the stocks or shares and being exposed to the obvious risk of losing capital?
Could you please explain the insurance annuity you mentioned in more detail?

.....

The first option I was talking is buying shares or a fund that invests in a very wide range of shares that provide a dividend income. An good example (not a recommendation!) is Vanguard FTSE UK Equity Income which currently yields 3.99%, tax free to UK standard rate tax payers. I dont know what happens about tax in your situation. Such a fund will rise and fall (hopefully in the long term rise more than fall) with the stock market and produce a rather more stable, but not guaranteed, income. If you went down this route you might split your £40K into perhaps 4 different funds for added safety. An IFA could propose something that prevents you experiencing the full effects of a crash, but yes there is the risk of losing capital, hopefully just in the relatively short term until the market recovered. You could sell part or all of the funds at any time at the market rate but of course this would directly lower your income.

The annuity in your case would be a "purchased life annuity" in which you pay a lump sum to an insurance company which pays out a steady income for however you and/or your wife live taking the risk that you live too long for your £40K to last out. Here of course you lose the whole of your £40K so most of what you get back is your own money, which of course has major tax advantages. I would guess that you and your wife are currently too young
too make this a viable option but its something that may be worthwhile in your old age. Google "purchased life annuity" for more info.

A good IFA should be able to explain all the options to you and recommend appropriate products.

Linton

EdGasket wrote: »

...... I have had much more than £40K invested in a mixture of bonds, funds, and shares over the past three years and am showing a loss!

That is quite an achievement! Bonds have increased significantly in value and the FTSE100 is more than 10% higher than 3 years ago. And then you need to add in the approx 10% worth of dividends you would have gained had you invested in the FTSE100. Perhaps a visit to an IFA would help with your investment strategy.

truth57

Jegersmart wrote: »

It would seem imperative to me to a) look at the original documentation and find what the trigger events would be, and then b) gain clearly documented proof that these occurred. I would not accept written confirmation from them only, but verify these independently/yourself.

Good luck.

J

Thank you. Sorry for being obtuse, but how can I go about verifying these events independently - I am way out of my depth here! Where is such information available?
If this matter is taken up by the Ombudsman, do they carry out such research when investigating a case as I suppose a solicitor would have to?

Reaper

truth57 wrote: »

Thank you. Sorry for being obtuse, but how can I go about verifying these events independently - I am way out of my depth here! Where is such information available?
If this matter is taken up by the Ombudsman, do they carry out such research when investigating a case as I suppose a solicitor would have to?

Once you know the trigger events you may well be able to look them up yourself. For example it might be a stock market index has dropped by 50% during one of the years or a particular share. If so they are easy to check.

BillJones

truth57 wrote: »

Apparently there was both a fall and rise in the value of the investment above the threshold for these 'trigger events'. That is all I was told. Apparently the investment had risen in value by over 40% during the final month, which triggered the event so that no interest was now payable. That is my understanding of the situation.

Once I receive a full explanation in writing I will post it here.

Don't you have your original documentation, a "Key Facts" document, or similar?

truth57

BillJones wrote: »

Don't you have your original documentation, a "Key Facts" document, or similar?

As I mentioned, we were locked out of our home for an entire year by our sitting tenants. Now aside from everything they stole or destryed we are still recovering from the turmoil, so the short answer is that right now I have no idea where the original documents are. But I am going to rummage through my paperwork where my financial stuff should be...