bloody banks Fa

ultraskinflint

In the last wk been asked by my mother in law to look at her investments which she took out 4yrs ago.

she invested 90k through nationwide

this is advice given

57k in bonds. ylds 5.4% before tax. investment now worth 52k

7k bonds through isa ylds 5.4% 6.5k

10k 7yr bond with guaranteed 110% not sure how much it is worth

10k tracker fund that charges 1.25% annual charge! now worth 16k

6k world fund thats worth 9k

total commission for this carp advice 5k. She is in her 60's and totally disgusted with nationwide who she trusted and told her there was nothing to pay for the advice, and that it worked for the benefit of there customers!!

wondering what options are now in the way of complaining? she has wrote a letter to the daily mail, "prob wont get there until next yr" nationwide, is considering getting in touch with the fsa.

How can they ever justify 5k commission?? surely about time this corrupt idea of commission was abolished?

any advice welcomed..

SeanW

Sounds like you didn't see an IFA but a bank/building society.

Bank's/Building society's are not independent, they sell you their products only, which are not known for being good investment choices.

Ian_W

ultraskinflint wrote: »

any advice welcomed..

Yes - change your title!
AFAIK Nationwide don't employ IFA's - clue = the I stands for Independent, which means they're employed by you to give advice across a range of providers.
Whereas Nationwide employ people to advise on the products they sell, not what's best for your ma in law, just what's best from what they have available.

TBH, it's often said on here not to seek financial advice from Banks and BS's and your MILs case seem to illustrate exactly why you shouldn't. In terms of complaining - you need to exhaust NWs own complaints procedure before you can complain to the FOS [not FSA] but if all the paperwork explains the charges and products clearly then unless your MIL isn't capable of understanding them she made a mistake and I'm not sure you'll get too far. Sorry I can't be more helpful.

NW - proud to be different?
No just the same as the bloody rest.

ultraskinflint

Rectifeid. to banks f.a

What is upsetting is that she could have used an IFA that would prob have charged half that amount and given twice the advice. The thing about the commission she paid is that she was told it was free and would pay nothing. She isn't that clued up about finance and would just trust the "advisor" and didn't understand that the advice would come out of her capital.. it still amazes me that you can pocket 5k for advice and have no responsibility for it. any other walk in life you would be able to get a refund.
I have told her to move them to H-L now so at least that won't cost her anything and she will get better products.

Thanks for advice given so far.

Ian_W

ultraskinflint wrote: »

57k in bonds. ylds 5.4% before tax. investment now worth 52k

7k bonds through isa ylds 5.4% 6.5k

10k 7yr bond with guaranteed 110% not sure how much it is worth

10k tracker fund that charges 1.25% annual charge! now worth 16k

6k world fund thats worth 9k

Starting at the bottom, at least the tracker and world fund are showing a profit, as you say HL should do them cheaper and you might get better performing funds there as she'll not be limited to NWs own, as I assume is the case now.
The 7yr bond sounds like it might be linked to FTSE growth, they're usually very poor value but you'll have to weigh up whether it's worth pulling it now, when she may only get her money back or letting it run it's course and get some return on it.
The top 2 seem strange - are they proper investment bond funds or saving type accounts that the banks love to call bonds? If they're the latter it seems very unusual that there should be any charges, let alone £5K+.

Whilst in strict terms I wouldn't be hopeful that a complaint would be upheld, you may be able to ram the "proud to be different" slogan down NWs throat in terms of how they've treated a trusting, non-financially savvy lady who put her trust in them and ended up paying dearly.

ultraskinflint

Hi, the bond is called a high income fund which has paid less income than a good current account with the added benefit of the capital being worth less. the tracker funds have done ok but charges are very high. I think the 7yr bond is linked to world wide stock market but isn't very clear. sure there is some get out of having to pay how much the stock market has grown in last few yrs. Think prob best to go down the proud to be different way as advised first but don't think any joy will be had. She is going to write to the mail anyway and might be worth writing watch dog, working lunch. Don't see any difference with this than say a builder ripping you off. Maybe make good house of horrors type tv show going undercover.. people should be made aware so it couldn't happen again.

EdInvestor

It just shows how pathetically awful the system is that reading the above list tells you nothing whatsoever about where the lady's money is invested.:(

dunstonh

There is nothing to complain about I'm afraid. Investment returns are not a claimable event.

Tied agents dont have the same responsibilities that an IFA has. Most cannot portfolio plan and of course you are limited to their product range. I'm not sure how she has managed to lose money in the last 4 years. The last 12 months hasnt been great for fixed interest securities but the 3 years before that were not bad. Although corporate bonds and gilts havent been great, UK other bonds were fine. Perhaps she is drawing more than they are making.

As others have said, when you have investments and want advice see an IFA. Not just any IFA either. Make sure they are investment specialist IFAs (i.e. one's that deal mostly with investments and not mostly mortgages for example).

ultraskinflint

It's shocking and gives everyone in the industry a bad name. The thing that makes it even worse is she was going to buy a house to rent out but the advisor said she would get her £400 pm no problem and she didn't need the hassle. hindsight and all that. Think trying to shame them is best option so that at least if she does get nothing out of them it might make others think twice about using them..

dunstonh

It's shocking and gives everyone in the industry a bad name.

It is. However, it is being addressed. The FSA have proposed that the current level of advisers will be "downgraded" to almost a flow chart style of advice and have FOS protection removed. However, IFAs will be upgraded with a requirement for higher qualifications. Therefore making a clear cut difference between the types of adviser.

The thing that makes it even worse is she was going to buy a house to rent out but the advisor said she would get her £400 pm no problem and she didn't need the hassle. hindsight and all that.

He was right. Investments from about 4 years ago could easily have paid out 5% net and seen about 30-40% growth in that time. The problem is the way they have been set up (especially with use of a GEB) was going to find it hard pushed to achieve that.

ultraskinflint

well that seems like a better idea. guess the training they get from the bank is only slightly better than a mortgage advisor and should never be dealing with such amounts of money. Like everything in life you get people who are the top of there game and study everything out there and people who just do there job and more than likely wouldn't even read the times on sunday finance section. I remember my brother asking a mortgage advisor about sipp's along side his pension a yr ago and the advisor had never heard of them..

Thanks again for the advice.