Bad Financial Advice

durali

Is it possible to claim against bad financial advice?
We were given advice by a Financial Adviser in a bank and told to buy £10000 worth of technology shares.
We explained we had read about a possible crash yet were still recommended to buy them.
Subsequently they lost £7000.
My risk profile would be low whereas my husband's would be high.
I thought that would balance out to mean medium.
The shares were bought in may 2000 and half sold in April 2007.

BLB53

I think you will be out of time as claims have to be brought within 6 years (I think). Why have you left it so long?

dunstonh

Is it possible to claim against bad financial advice?

Yes

We were given advice by a Financial Adviser in a bank and told to buy £10000 worth of technology shares.

Financial advisers give advice on retail financial products. Banks, historically, have given advice on their own product range which only contains retail financial products.

Shares are not retail financial products and do not normally form part of the advice remit of the bank FA. Are you sure this was an adviser and not a bank clerk speaking as if "man down the pub" style? The bank FAs typically recommended funds not shares.

The shares were bought in may 2000 and half sold in April 2007.

If it does fall under regulated advice, you could be timebarred. You have 6 years from the purchase AND 3 years from being reasonably aware of an issue to raise a complaint. Both rules have to met to allow a timebar. Its clearly past 6 years and the sale in 2007 would act as a trigger for 3 years. So, both rules would be met and they could reasonably timebar any complaint.

bostonerimus

Who decided to sell? What makes you question this transaction after over a decade?

I really do think that people should become familiar with Caveat Emptor.

jimjames

I seem to recall another poster asking a virtually identical question a few months back with much the same responses given.

I'm assuming you don't have it in writing from the bank? If you'd kept them you might be sitting on a tidy profit now

durali

Thanks everyone for your reply.
dunstonh thanks again you helped me with my PPI recently.
When you say "timebarred" do you mean the bank can timebar it on the point of us being too late to complain?

durali

The reason it has come to light now is I am sorting and getting rid of old documents.
The advice though through a bank was independent financial advice from a financial adviser, not a bank clerk.
Half the shares were sold on divorce but my ex kept his half.

dunstonh

The advice though through a bank was independent financial advice from a financial adviser, not a bank clerk.

Are you sure? The majority of banks did not employ/utilise IFAs as they offered their own product range. There were a couple of exceptions to that. What bank was this? (it would help us identify the service)

However, even if that is the case, IFAs are not stockbrokers. A few banks operated a discretionary management arm who did have stockbroking permissions. However, they were not IFAs but DFMs (discretionary fund managers).

Were the shares purchased by you or your ex (or half each)?
Can you recall the share name?

When you say "timebarred" do you mean the bank can timebar it on the point of us being too late to complain?

Yes. The bank could refuse to consider the complaint on the basis that it meets both the 3 year and 6 year rule (more than 6 years since purchase and more than 3 years from sale). They may not apply that rule. Banks can be a bit scattergun in how they deal with things.

bostonerimus

durali wrote: »

The reason it has come to light now is I am sorting and getting rid of old documents.
The advice though through a bank was independent financial advice from a financial adviser, not a bank clerk.
Half the shares were sold on divorce but my ex kept his half.

It's sometimes hard to own bad financial decisions, but it sounds as if you chose to sell the shares or at least did not check the details of the transaction that surely needed your signature.

durali

It was Yorkshire Bank.

I think it was Henderson Global Investors. A joint investment.

bowlhead99

durali wrote: »

It was Yorkshire Bank.

I think it was Henderson Global Investors. A joint investment.

Henderson's global technology fund did lose 80% or more, back in 2000- 2003, along with other funds in the technology area. It was a high risk fund which might have fitted with your husband's preferences assuming he had investments in other things also.

However, as you knew it was a fund that was not suitable for your needs back in 2002/3 when it had dropped in value by that huge percentage - and certainly by 2007 when you decided to sell half of it at a relatively low value - it seems somewhat ridiculous to try to pretend *now* that you have only just noticed for the first time (rather than over decade ago) that it wasn't the type of fund that should have been recommended to you out of the options the adviser had available for sale based on what you both told him you wanted at the time.

So, I would expect the bank to turn your complaint away, as if you wanted to complain you should have done it within a few years of noticing you wanted to complain about something.

Incidentally, the fund is now *up* about 80% from 1 Jan 2000, assuming dividends reinvested.