Pension pot 'frozen' and dropping like a stone

atush

gadgetmind wrote: »

Is there a good guide on how punters can lodge these complaints against advisers and what the process is?

AFAIK the first step is to lodge a formal complaint with the company/

I'd be leery of doing this before i transferred the pension in this case. Or at least transferred the holdings- into something else or even cash. the time taken to get where you are going could mean much higher losses.

I cannot see how the IFA is still in business and still has insurance cover.

File a complaint to be sure.

addedvaluebob

Definitely a complaint every day of the week. The pension fund apparently represented a significant part of the customers overall investment wealth and should not have been put into high risk funds. The OP has not put the overall suitability report but I am assuming there was some form of document produced that should also show the previous fund details and a direct comparison showing costs and charges. Without this information the customer could not have made the decision to transfer from a position of informed choice.

One of the documents about the portfolio service states that they will monitor the investment but clearly this has not happened.

Attitude to risk has been decided with nothing more than an altered tick box with no supporting evidence of any kind.

None of the amendments show any client signatures

In the investment questionnaire it says 'little experience but suspicious' and this has been crossed out.

Given the age of the investor they would be relying on this as part of their retirement income and presumably could not afford to see this value significantly reduced/halved.

He should also raise a complaint about the investment part of this advice as well, they have obviously taken advantage of the investors lack of knowledge to stick him in this pile of junk.

He should get out of this scheme asap and transfer to a fund invested in mainstream funds or cash it in if tax etc allows.

With all the warnings about dodgy pension advice in advance of the rule changes it seems there are still some IFA's who are more interested in lining their own pockets than doing what is right for the customer.

Make a formal complaint to the company, they will almost certainly turn it down and you will end up at FOS and it could be a couple of years before it is finally resolved but this IFA has cost your friend tens of thousands of pounds and should be made to put it right

jamesd

A complaint is definitely appropriate here. One possibly key major red flag is the level of risk that would make him uncomfortable being in the 20-25% range while the investments used had a drop potential in the 80% range. Such massive concentration in precious metals and oil is completely inappropriate for the experience and loss potential specified. The altered answers are also a concern.

Appropriate redress would be return of the originally invested value plus statutory interest from the time of the investment.

In the short term he should instruct them to place all of the money into cash within the pension.

Pincher

Sounds like the good old Hi-Tech boom around 2000.
Every other fund is a Hi-Tech fund. By 2001, everybody had lost 50%.


Gold goes up from $300 to $1,800, so they milk it till it hurts.
Oil is the same.


Buying these trends just mean that you bought at the top, and there is only the plummet sooner or later. If producing funds to order by fashion is a crime, they should design prison uniforms in pin-stripes.


They will trot out the "past performance is no guarantee" thing for sure, despite the whole sales pitch is based on how fast it grew before.


Love to hear that the investor get some compensation for it, it will be the next PPI, because trendy funds have been going on for decades.

dollyponduk

Just wanted to say a big thank you for the many great replies to this query. Some very good points which my friend had not thought of as well as giving him the confidence to stand up to this company.
Since posting he has had a phone call from AJ Bell asking who is now representing him as he is not allowed to represent himself and as HBS are no longer doing it who is? Well he did not know HBS were not anymore. Looks like they have bailed out in the hopes of no repercussions to me. Anyway a neighbour who has an independent financial advisor who is supposedly marvelous has passed on the details so we are hoping he can sort drawing it out then definitely take action against the bad management (well no management!).
My friend is very honest and old school and questioned whether I should have left the HBS logo on the documents I posted, but I think if they believe they did a good job they should be pleased and if not they should be named so nobody else loses money with them.
Anyway I'll let you know what happens in the end and thank you all so very much.
Kind regards
Angela

dollyponduk

atush wrote: »

Well that was my take. Glad to see it confirmed.

As I said before i'd love to see the report done at the start about his risk profile.

Posted new1-new9 as they are the only things that might be a risk profile you mention?

jamesd

Some financial advisers are content to help out their customers with mis-selling complaints, some aren't. It would be useful to ask that potential new adviser if they are interested in helping with it, in part to help to improve the quality of the industry.

The more recent documents appear to badly mis-state the investment risk of the Canadian gold/silver investment at 4, while confirming that the rest are estimated to be 8 on what I presume is a ten point scale. This is way above the drop potential given in the fact-find.

It is good that on the 11th February 2011 portfolio changes letter HBS write that "We class this as a Focused Portfolio, and is pretty much at odds with mainstream Financial Advice", which is correct, it's way out there, with no standard financial advisers expected to suggest 90-100% investment into investments with an 80% drop potential when the customer has specified 20% in their risk questionnaire. Yet they seem not to have explained that the drop potential is four times that specified by their customer.

Marktheshark

Brokers hide losses in peoples Pension pots, so it might be worth trying to find out what transactions were made in to the pot and by who.

addedvaluebob

Some financial advisers are content to help out their customers with mis-selling complaints, some aren't. It would be useful to ask that potential new adviser if they are interested in helping with it, in part to help to improve the quality of the industry.

A significant number of the cases referred to FOS are already from IFA's complaining about the work and recommendations of their colleagues and a number of the CMC's are run by financial advisers so I am not sure how this will help improve the industry given that any CMC is labelled as being a crook or doing nothing the consumer cannot do themselves