Company Shares

Terri_W

I was employed by Halifax plc from 1996 and in the late nineties I think we were actively encouraged to buy shares at a lower price rather than take our annual bonus. I did this each year until the crash of 2008 as the company told us that it was a win win situation. We could buy shares at a lower price and get half as much again if we didn't take our annual bonus. After the crash, my shares lost over 90% of their value and have never recovered leaving me thousands of pounds out of pocket. Has anyone else experienced this and is there anything we can do. 

eskbanker

Yes, all longstanding shareholders of Halifax, now Lloyds Banking Group, experienced massive loss in value of their holding in 2008/9, since when it's remained in the doldrums.

Any investment has the potential to go down as well as up, it goes with the territory, but even if you have some sort of documentary evidence that Halifax as an employer actively encouraged purchases by falsely asserting that it was a win win situation, I suspect that it would be too late to do anything about such alleged misselling now, so many years later.

bowlhead99

Terri_W said:

I was employed by Halifax plc from 1996 and in the late nineties I think we were actively encouraged to buy shares at a lower price rather than take our annual bonus.

You 'think' but you don't know?

I did this each year until the crash of 2008 as the company told us that it was a win win situation. We could buy shares at a lower price and get half as much again if we didn't take our annual bonus. After the crash, my shares lost over 90% of their value and have never recovered leaving me thousands of pounds out of pocket.

It was probably a good idea to spend your bonus buying shares in your employer at a discount, because you could then sell them and make a profit. It does sound like a win win situation to do that. Your employer wasn't employed by you to be your financial advisor and didn't sell you any regulated investment advice, so there is no redress available from the financial services compensation scheme. And even if you wanted to sue them personally because you believe they misled you about the risks about owning shares - they simply told you that being able to buy something for less than its market value at the time was a bargain, which sounds like common sense. However, if some of the shares you bought went down in value severely compared to the purchase price, you might 'lose' on those ones, even if you had made a profit on some others; you win some you lose some.

If you decide to hold all the shares indefinitely, your personal wealth would be heavily exposed to the fortunes of the company, and you could lose a lot. Each decision you made not to sell the shares at a profit after buying them, has cost you money. That was your decision, to buy discounted shares in the late 90s and early 2000s and not sell them.

For decades we have heard the phrase 'investments may go down as well as up' and even a child in the 90s would have seen and heard the slogan on billboards or TV and radio commercials; it is as ubiquitous as 'your home may be at risk if you do not keep up repayments on your mortgage'. I'd heard those things in the 80s even before I knew what investments or a mortgage was. So buying shares in a company and keeping the shares indefinitely when you know the share price goes up and down over the course of every working day, cannot be risk free.

After the crash, my shares lost over 90% of their value and have never recovered leaving me thousands of pounds out of pocket. Has anyone else experienced this and is there anything we can do. 

If you bought shares twelve to twenty four years ago at a discount, decided to keep them in the hope of making money, and watched them fall in value over a decade ago, there is nothing you can do now to magically make the shares worth more money again. Nobody is interested in hearing a complaint that the stock market doesn't think the shares are as valuable as they once were. Even if some compensation scheme existed for owners of old Halifax shares, it is a bit late now to be saying you've just noticed you lost thousands. The severe share price moves happened more than a decade ago.

Your practical choices are to keep your Lloyds shares in the hope that they become more valuable over time, or sell them and invest the money in something else (perhaps some investment fund) which you hope to become more valuable over time.

steampowered

Unfortunately, by keeping all of your money in a single share, you were exposed to a high level of risk. Individual company shares can double or they go to nothing.

You would have been better off selling your shares, and instead putting your investment into a diversified portfolio (such as an investment fund, or at least splitting your investment across a few companies). Unfortunately I don't think there is anything that can be done about that now.

NottinghamKnight

My mother in law did this with lloyds, once we found out we encouraged here to sell out which she started to do but only got maybe 20% out before the crash.