Marconi shares

JGHdaisy

After coming into some money in 2000 my hubby and I were advised by our bank to invest a good bit of it on the ftse 100. This was sold to us as medium risk as all the companies were uk. Quite a bit was invested in Marconi, who crashed 12 months later.
We also lost on other shares but the biggest shock was the Marconi ones. When I called the bank I was told not to worry as 'Its only on paper'.
Anyone know if we can reclaim anything so long after? We were totally new to having any money and feel the bank advisors gave us misleading info and did not take account of our inexperience or our attitude to risk.

eskbanker

'Medium risk' in itself is a fairly meaningless term - what process did you go through with the adviser to establish risk attitudes and tolerances? What sort of documentation trail is there from that initial stage?

Investment always involves risk so losses in themselves aren't necessarily indicative of a potential claim, but there is a responsibility on an adviser to establish what was appropriate and explain it. It would be unusually poor advice to recommend novice investors put money into specific equities without diversifying properly though....

AnotherJoe

Your post is somewhat confusing. You say you were advised to invest "on the FTSE100" which implies you bought (were sold?) a fund that covered the whole FTSE100, but then you say "a fair bit was invested in Marconi shares" and "we also lost on other shares" which implies you bought Marconi and other shares directly.

Which did you do ?

The fact you dont seem to know or understand the difference and are still confused so many years later does imply to me that you both didn't understand what you were doing and that you shouldn't have been buying these.

But, so many years later i doubt there's any trail to show what happened, plus it was a different regulatory regime and maybe once you ticked a box to say "yes I agree shares may go down as well as up blah blah blah" that was enough for you to accept responsibility for a bad choice whereas nowadays things may have been different.

Malthusian

How much did you invest and how much is it worth now?

The Financial Ombudsman Service will only consider complaints up to six years from the event you are complaining about or three years from the time you should reasonably have known you had cause for complaint, both of which are long passed.

As you have not told us what the investment is worth now vs. how much you put in, or any reason why you should not have been considered a medium risk investor, there is nothing in your post that would be grounds for a complaint anyway, even if it were not time-barred.

jimjames

I can't believe any bank would have advised buying individual shares. Most stockbroking is purely self selection and non advised so it does seem very unclear.

What proportions were in what shares? Do you have the advice written down anywhere?

le_loup

I bet most people were buying Marconi in 2000.
.............. and all those shareholders voted for a bunch of idiots to run the company for them.

JGHdaisy

Hi thanks for your replies.
We had come into some money very unexpectedly and the bank offered advice. Two advisors came to the house and advised a portfolio with included 10% in a 5 year bond and an ISA with the rest invested in ftse 100 companies. Over time money would be moved from ftse investments to the ISA.
The ftse companies were selected by the bank as were the amounts invested in each. In fact they chose everything in the portfolio and we probably foolishly trusted them to know what they were on about and signed the paperwork. We received updates on a 3 month basis with them moving our money between ftse companies for us.
The amount invested in Marconi was around 10% of the total invested. This was a higher % than in some other firms. The advisors said they invest more in known good investments so we didn't question it.
It was a long time ago but I do recall a lot of tick boxes including the one about the value of investments can go down as well as up. But being so inexperienced we were probably overloverly reassured by the advisors saying we were protected as our money would not be leaving the UK.
I did contact the ombudsman in 2005 and was disappointed to be told that as we were young enough to make the money back in future they wouldn't be taking it further. Seems unfair when folks get compensated all over these days. They did acknowledge that the bank should have taken more account of our experience.
As marconi went down the tubes we lost all the money invested in them. We stuck with the portfolio for a time after the shocking losses following 911 but in the end walked away a few years later as we just couldn't take the stress and worry anymore.

AnotherJoe

Ok so that was shockingly bad advice all round in all respects.

But if you went to an ombudsman 12 years ago and were turned down I'd have thought you were out of luck now.

Reaper

On the negative side you knew and accepted there would be "medium risk", which means you knew there was a chance they could fall in value.

You also made a classic mistake selling up immediately after 9/11. Crashes happen every few years and as a rule you should not sell when one is in progress. You need to sell when prices are high not low.

I agree the bank "experts" gave rather poor advice. A tracker (FTSE or other) would have been simpler and safer than individual shares for inexperienced investors. However I doubt you have a winnable case.

eskbanker

JGHdaisy wrote: »

I did contact the ombudsman in 2005 and was disappointed to be told that as we were young enough to make the money back in future they wouldn't be taking it further. Seems unfair when folks get compensated all over these days. They did acknowledge that the bank should have taken more account of our experience.

That perception about compensation isn't particularly helpful or relevant - nobody is ever compensated for investments underperforming (and that's the way it should be) but in some cases people will be compensated specifically for being victims of mis-selling of various products or services.

I'm not sure how the ombudsman service was set up in 2005 but would expect them to be looking at whether due process was followed (rather than the eventual outcome) so if you were unable to convince them that the process followed was flawed or deficient then, then it's way too late to seek a second bite at the cherry now.

If the ombudsman actually said in 2005 that "as we were young enough to make the money back in future they wouldn't be taking it further" then that would clearly suggest that they saw nothing actionable about what the bank's advisers had done in 2000 (which admittedly does seem odd based on what you've said on here). However, what do you think has changed in the subsequent years that would warrant going back to the ombudsman now?

JGHdaisy

Thanks guys for all your replies.

I appreciate it was a long time ago. I was upset about it at the time and complained to the bank and later to the ombudsmen.

I asked here for thoughts as my mum keeps on at me about the ads in the papers about mis sold investments. Thinking maybe it was more recognised now that in the past banks and financial advisors have not always done what was in the best interests of their customers.

I accept that it was too long ago to do anything about now. Hopefully standards have improved but I will never be in a position to find out first hand. Next time I come into money I will be keeping it very safe and far away from any investments of any kind.

Thanks for taking time to read, commiserate and reply. Ciao for now.