Retirement was ruined by a financial planner

bowlhead99

Thrugelmir wrote: »

Commercial property lending brought HBOS down. Likewise made Lloyds the 4th largest house builder in the country, owning Cala Homes and McCarthy & Son amongst others.

Blaming an individual sometimes needs to be kept in perspective in light of all the facts. Hence why the relationship probably continued.

Oh yes I agree that 'only' losing 20% due to commercial property exposure in the credit crunch was not the worst possible outcome and the couple probably heard that the sky was falling all around and the adviser said he was not really at fault as every part of the financial market was all going titsup. So it perhaps didn't seem all that outrageous at the time, and then they agreed he was a jolly good bloke and blindly went with him into the next obscure unregulated venture with their eyes closed.

I do have some sympathy for them for not walking off once he lost them money on real estate when he smooth talked his way around the issue. If you don't know what you are doing it is easy to get misled.

However after later putting two and two together in the cold light of day, they made a complaint and the advisor's firm from the time of those losses gave them compensation in excess of their actual lossses as they shouldn't have had all their money in those assets in the first place with their stated and documented risk profile.

They should have made that complaint in the first place rather than loyally sticking with the advisor - and when they later started getting letters from the advisor's firm saying that their pension trustee was alarmed by the fact he had now put all their money into one high risk unregulated investment, they should not have agreed with him to put the letters in the bin and follow him over to another firm to which he was going to become a partner/director.

I agree with Radders above that working in one part of the finance industry does not automatically give you insight into another. However, working with bank deposits or mortgages is perhaps far removed from constructing a retirement portfolio to protect or grow your wealth. Whereas if you work as an insurance underwriter you do have an appreciation of the nature of risk and probability etc and if someone loses you a lot more than they said you might lose, and then goes on to suggest you put all your remaining eggs in an unregulated offshore 'recycling fund' basket, you might say 'OK so what are the risks and where do I find out more'? Rather than blindly nodding along.

Especially when your pension company writes to you and says, "Dude !!!!!! are you doing this is a risky fund that we don't generally support, so it's not at all a low risk fund to stick your entire wealth into, would you like to get out now?"

There is no doubt that the advisor was a bad egg and the article is right to query whether his professional body should question or sanction him for a lack of professional ethics now they have been alerted to the decisions he made which cost his clients money. If they ask him, he will probably say he deeply regrets his past actions and now that the regulator won't give him permission to act as an advisor, he no longer advises, he just helps other people get things to a position where someone else can sign it off, drawing on his training and past experiences to do his best for his clients. Ah what a nice fellow.

dunstonh

PasturesNew wrote: »

If you don't know your 4rse from your elbow though - you're supposed to go to these financial people, who are regulated to do the right thing.

If you don't know your 4rse from your elbow ... you have to trust professionals because ... you don't know your 4rse from your elbow.

Those capable of doing their own research probably wouldn't need any professional help, they can research and understand.

These people do it all day long, they study, they know, they chat about, they watch, they notice.... they are supposed to be professionals who listen and do the right thing ...

Otherwise, what's the farquin point of bothering to ever call any financial advisor about anything?

You missed the scenario of the thread. The person didnt use a professional. He used someone masquerading as one. That is where many of the scams and dodgy dealings are.

Unregulated investments do not require an adviser. Unregulated investments pay commission to unregulated people. So, unqualified and unregulated people have been setting up unregulated investments thinking they could get away with it. However, the FOS is able to deal with them if the firm is regulated in other areas or they are a network member who acted outside their remit (leaving the network to pick up the tab). These are typically mortgage and insurance brokers and nothing to do with investment advisers. I have come across some scam cases where the advice firm didnt even know their name was being used.

justme111

dunstonh wrote: »

You missed the scenario of the thread. The person didnt use a professional. He used someone masquerading as one. That is where many of the scams and dodgy dealings are.

Unregulated investments do not require an adviser. Unregulated investments pay commission to unregulated people. So, unqualified and unregulated people have been setting up unregulated investments thinking they could get away with it. However, the FOS is able to deal with them if the firm is regulated in other areas or they are a network member who acted outside their remit (leaving the network to pick up the tab). These are typically mortgage and insurance brokers and nothing to do with investment advisers. I have come across some scam cases where the advice firm didnt even know their name was being used.

indeed. I think pastures new was referring to a previous comments of other posters that said that on has to understand what they are doing and critically assess it's suitability even if using (indepndent) FAs.

BananaRepublic

RADDERS wrote: »

I think that’s a little bit unfair, I worked in the finance industry but with mortgages, I am pretty clued up on the, but investments I really don’t have a clue and are terrified that I will get it wrong. That is why at the moment all my savings are in cash and I know that isn’t the best strategy but I won’t loose my savings.

Surely given your background, when looking into a financial product would you not make sure that the person in question was qualified to sell the product? That I think is the issue, not lack of expertise. Yes I can understand that you might not understand about investments despite your job. I can 'do' investments, but I can't 'do' tax. The way tax works often seems so unintuitive to my logical mind.

dunroving

BananaRepublic wrote: »

Surely given your background, when looking into a financial product would you not make sure that the person in question was qualified to sell the product? That I think is the issue, not lack of expertise. Yes I can understand that you might not understand about investments despite your job. I can 'do' investments, but I can't 'do' tax. The way tax works often seems so unintuitive to my logical mind.

Yes, especially when there is £100k's of your money at risk.

The old adage "If it looks too good to be true, it probably is" comes to mind.

bostonerimus

An educated consumer is the best way to avoid scams and stupid advice. Unfortunately there are vested interests and down right crooks that don't want to see that and do as much as they can to make investing seem complicated.