Barclays managed growth fund isa

midge406

My parents invested £5000 in Barclays managed growth isa in 2000. They were told it would double in value in about 10 years and was safe. They didn't realise there would initial charges of around £700. It lost lots immediately and has only now reached £5200 after 14 years.

They are pretty clueless when it comes to money. I'm going to write to Barclays to complain and will then contact the financial ombudsman to complain about miss-selling. I imagine they'll say it was always a risk with it being stocks and shares but it's worth a go. Does anyone have any thoughts on this?

After that I'd like to transfer it for them to another stocks and shares isa. Is there generally a charge for that? Do people think this is best or would it best to withdraw the funds? I don't know however whether Barclays will charge.

Thanks for any advice in advance

Stuart

jimjames

£700 sounds very high for initial charges, normally it was a maximum of 5.5% which would have been nearer £250.

Have you actually seen the paperwork or are you relying on memory?

The growth doesn't sound great over that time but 2000 was a fairly high point. Have their received income from it since then? If they've taken income then that would have wiped out a lot of the potential growth.

If any paperwork says it was guaranteed or safe then that may be a reason but poor performance isn't as far as I'm aware. Before you make a complaint I'd suggest you need to make sure all your facts are correct so you know exactly what you are trying to achieve.

Totton

A complaint for mis-selling may be possible, eg. if you can show the investors risk appetite was not correctly assessed or the product sold was inappropriate for them. I think you need to see the original paperwork. Didn't Barclays recently have some grief for not correctly labelling risky investments which they then sold as low to moderate risk? I may be wrong but recall something in the papers about a year ago. I'm not sure that would apply to the managed growth fund though.

Remember to add dividends onto the overall return on investment figure. The dividends may have been paid separately to your parents.

There should be no charge to transfer to a different ISA provider but there may be a charge to close the original account whilst the new provider may not offer the same investments which will mean dealing charges incurred. I've found it is much quicker to sell the investment and then transfer the ISA in cash, that seems to negate a lot of the delays spoken about.

As an aside, why not measure the Barclays fund against something like the Jupiter Merlin Growth fund which as a fund of funds has a high cost, however it has been going for a ing time and com parings performance with it should give a better idea whether the Barclays fund has under performed or not.

dunstonh

They were told it would double in value in about 10 years and was safe.

Better wording is that it could double in about 10 years and in most 10 year periods it probably would have. Do, they have any evidence 14 years later that they would told it would double rather than could double?

They didn't realise there would initial charges of around £700. That doesnt seem likely. Are they perhaps reading the cost of advice illustration which in 2000 would not have used the actual charge but a hypothetical cost of advice for bancassurers? Bank initial charges were typically 5%. You are saying it was 14% and I have never seen bank charges on investments anywhere close to 14%.

I'm going to write to Barclays to complain and will then contact the financial ombudsman to complain about miss-selling.

On what basis is the complaint? The regulator do not allow complaints about investment returns.

In 2000, they were barely into the tech crash and the other events that followed and then we had the credit crunch. So, the figure does not sound too far from what you would expect for that year.

If you are going to complain, then get your information correct. At the moment, it doesnt seem right.

midge406

They haven't had any dividends.

The paperwork doesn't mention no risk or guaranteed income etc but that's what they were told by the salesperson

gadgetmind

If they'd stuck the money into a low fee FTSE 100 tracker, it would have been close to double by now,

Their timing was bad and the fees were clearly astronomical. However, 14 years to realise that all's not right strikes me as being very long, and what someone did/didn't say back then is impossible to prove. You need the printed material or you have little chance.

dunstonh

They haven't had any dividends.

Unit linked funds dont pay dividends. They have distributions. However, they are not paid out with accumulation units but reinvested within the fund and the unit price adjusted to reflect that value added.

The paperwork doesn't mention no risk or guaranteed income etc but that's what they were told by the salesperson

Then you are not seeing all the paperwork. The illustrations in 2000 would carry a range of risk warnings. Such as "the illustrations are examples and not guaranteed. you could get back more or less than this". or "the value of your investments can go down as well as up".

That investment is not a guaranteed income product. So, there would not no mention. You need to focus on what is mentioned. Not what isnt. Trying to prove a verbal conversation that may or may not have happened 14 years after the event isnt going to result in a successful complaint on that particular point. Suitability and documentation are key.