Lloyds should be ashamed!

pip895

An elderly (83years) friend of the family asked me to sit in on a meeting with a potential financial advisor who had been recommended by a friend of hers. The advisor turned out to be from St James's Place,:o but all credit to him it soon became clear that he wouldn't get any business, as locking money away for years was the last thing this lady needed. He was very good and spent quite a long time sorting through her various investments (made for her by her late husband) and suggesting the ones that could potentially be cashed in and those that might have tax implications if she did.

Her requirement was to raise funds for her daughter who was in financial trouble and after the FA left I started sorting through a file entitled "Lloyds Confusion". I found a series of accounts in there with small amounts in all earning negligible interest. One account however looked to be the solution to her issue. She had 30k sitting in an account earning 0.55%.

We contacted Lloyds but it turns out this is a fixed term deposit which she took on after a previous one matured and there is no way we can get at this cash (the huge majority of her cash reserves) for another year not even if we forgo the interest. I am furious at the Lloyds sales person who thought it was a good idea to tie up this vulnerable old ladies cash reserves in such a way - all for 0.55%:mad:

What are your thoughts is it worth trying to shame Lloyds into releasing the cash or should I just help her with selling out of some of her holdings in her S&S Isa?

elsien

Elderly and vulnerable aren't necessarily the same thing. If your friend had no obvious reason to consider she might need the money in the next 12 months she may well have considered this the better option for herself.
My grandmother used these type of bonds regularly until well into her eighties because she considered them safe and wouldn't touch any other type of account no matter what anyone said to her, refused to even have a current account.
What evidence do you have that your friend was missold? And more to the point, what does she want to do about it?

PeacefulWaters

Tying money up for a year or two in return for a higher rate of return seems like a fair trade off. Even at age 83.

While there's shame in the crap rates Lloyds savings accounts offer, there's no inappropriate selling going on here.

SevenOfNine

pip895 wrote: »

She had 30k sitting in an account earning 0.55%.

We contacted Lloyds but it turns out this is a fixed term deposit which she took on after a previous one matured and there is no way we can get at this cash (the huge majority of her cash reserves) for another year not even if we forgo the interest. I am furious at the Lloyds sales person who thought it was a good idea to tie up this vulnerable old ladies cash reserves in such a way - all for 0.55%:mad:

Why do you assume this locking up of funds for a piddling interest rate was the result of advice from a Lloyds sales person? At 83 my mother was perfectly capable of making her own decisions about money - she's 90 now & still thinks that.

If this elderly lady plans to help out her financially struggling daughter, with what appears to be a large sum of money she's trying to gather up, she may need to be mindful of deprivation of assets given her age.

Just a small thought, 0.55% is better than nothing, which is what she's going to get when she's given it away!

Glen_Clark

PeacefulWaters wrote: »

While there's shame in the crap rates Lloyds savings accounts offer,

0.55% was more than double the bank rate. To be fair, you need to compare it with average rates, rather than the best buy internet rates advertised on here. And then factor in the cost of the personal service.

badger09

I agree with previous posters who say elderly does not necessarily mean vulnerable, and from what you've posted, there is nothing to suggest Lloyds persuaded her to do anything.

After her husband died 5 years ago, I started helping my then 75 year old sister to manage her finances, bills etc. While she initially agreed to follow most of my advice, netting her several £00s a year interest, when the time comes for her to renew maturing accounts, she often chooses to roll over into the best available from the existing provider, even though that is usually far from the best option. Basically, because the additional effort is not worth it for her.

Its a bit frustrating, but it is her money and her decision.

pip895

What concerns me is that it represents a very high proportion of her available cash. Even putting aside the gift she wants to make to her daughter it could leave her short if she needs to replace the boiler for example.

If there was a provision to extract the cash by forgoing some or all the interest it would seem more reasonable.

I will go ahead and extract the money from her ISA - at least it seems a not too bad point to sell equities and de risking her portfolio may not be a bad thing.

You are probably right - I am projecting my horror at a rate of 0.55% on to her. She said she was sure she wouldn't have signed up for something with such a poor interest rate, but that was probably after I mentioned how poor I thought it was:o

dunstonh

I am furious at the Lloyds sales person who thought it was a good idea to tie up this vulnerable old ladies cash reserves in such a way - all for 0.55%

Lloyds do not have regulated salespeople any more and havent for many years. So, it is unlikely that this product was put in place under an advice process. It is more likely it was just a bank clerk taking an instruction from the individual. Or it may even have been a rollover from another fixed term deposit with no staff members involved.

If you are going to allege a wrongdoing, then you need to be clear on how it was set up. Most of the bank stuff nowadays are non-advised transactions acting on client wishes. You may get info supplied about rates available on different accounts but the staff member gets no incentive whether the money goes in an instant access account, fixed term deposit or something else or even somewhere else.

Just because someone is 83, does not make them vulnerable and there are plenty of people that age taking out fixed term deposits. The bank staff member wont know if that person has £1 at a different bank or £1 million or what S&S ISAs etc they hold. They are not giving advice. So, they do not need to know.

bowlhead99

pip895 wrote: »

What concerns me is that it represents a very high proportion of her available cash. Even putting aside the gift she wants to make to her daughter it could leave her short if she needs to replace the boiler for example.

If she didn't want to lock her money away in a long term account because she wanted liquid cash reserves to buy a new boiler she could have kept a couple of thousand pounds in another cash account. You don't need thirty grand 'just in case' a boiler goes pop. In any case, you say she has other liquid assets in the form of S&S ISAs.

If there was a provision to extract the cash by forgoing some or all the interest it would seem more reasonable.

Such accounts do exist but when considering opening an account from all the thousands of savings and deposit products at Lloyds and elsewhere, the customer can take whatever decisions they would like to get them the best rate and least hassle and most flexibility. Everything is a trade off.

I will go ahead and extract the money from her ISA - at least it seems a not too bad point to sell equities and de risking her portfolio may not be a bad thing.

It seems a bit bizarre to be on the one hand, outraged at Lloyds and wanting them to be 'shamed' because 'locking money away for years was the last thing this lady needed' ; and yet she is sitting there with tens of thousands in stocks and shares investments which are by their nature, long term investment products.

There are a great many people in their 80s who have long term investments and long term savings (with lockins, long notice periods etc) - as they plan to be around for a long time and don't expect to need £30k of cash within the next year. So, "what products do you have that I could put my maturing deposit into, I don't need it in the short term" could quite reasonably be answered by the Lloyds clerk as "take a look at this fixed term deposit and let us know if you would like it".

You can't "shame" someone into releasing cash contrary to the conditions you agreed, when they have done nothing "shameful" If she was 20 years older and losing her marbles, you could perhaps try it on.

pip895

OK I stand corrected - I guess they were just being a bank.

I reserve the right to be fed up with them for closing the only two local branches round here that you could park anywhere near though.:rotfl:

bigadaj

I've got some sympathy for the OP and the individual, under what circumstances is a 0.55% fixed and no access account of benefit to anyone?


Inflation running at 2.5-3%, Ok it has been above the base rate but is far worse than many easy access accounts.


I have little sympathy for most people who hang onto the traditional undeserved respect for banks but in this scenario how can such an account be of any benefit?