Bad financial advice

durali

I asked a while ago about claiming for poor action by a financial company/adviser.

I was advised it would be "time barred" as it was more than six years after the occurrence.

I later heard a radio advert for Goodwin Barratt saying they could help you claim for lost money due to poor financial advice.

I telephoned a solicitor and was advised this type of investment/poor advice/service is not "time bound" for six years as long as it happened after 1996, which it did.

The investment was a unit trust with the financial arm of a bank.

My questions are:-

• Is it possible to claim for bad advice during the period of holding the investment 

• Is it possible to do it alone as solicitors take 40% + 8%vat.

• Is there a template/set of questions to ask the institution to ensure success. 

Many thanks 

eskbanker

Generally complaints about financial institutions are time-barred six years after the event (such as misselling) or three years after the complainant became aware of it (or reasonably should have been), whichever is later, so the six years isn't absolute if you've only just been made aware of the issue.

However, unless it's just a coincidence, the fact that it's a further three years since you last posted about this means that you're well out of time now:

https://forums.moneysavingexpert.com/discussion/5842407/bad-financial-advice

Thrugelmir

Seriously? 

We explained we had read about a possible crash yet were still recommended to buy them.

Stopped clocks are always correct twice a day. 

Retireby40

So basically you paid for a service.

You didn't get the desired outcome of that service.

And now you want your money back.

So basically you took the advice of a financial advisor. Invested and lost. Take this as a life lesson. There are no guarantees with investments.

If it was risk free everyone would invest and if the money went down they would try to sue the advisor.

Had you made huge profits would you have called the advisor up and handed him a brown envelope to say thanks? No.

durali

We explained we had read about a possible crash yet were still recommended to buy them.

No we didn't read about it then buy them. We already had them "then" read about a possible problem. We explained this to the adviser and was advised it's ok don't worry keep them. That's the "bad advice" I meant

durali

Sorry my original post is misleading.

We already held the unit trust. My ex read about a possible problem with technology investments. He asked the adviser about this but was encouraged to do nothing.

dunstonh

I was advised it would be "time barred" as it was more than six years after the occurrence.

The timebar rules are 6 years from the point of sale/event or 3 years from being reasonably aware of an issue.   Both rules have to be met to allow a timebar to apply.

I telephoned a solicitor and was advised this type of investment/poor advice/service is not "time bound" for six years as long as it happened after 1996, which it did.

That is not correct.

The regulatory complaints process matches the law but has no long stop.  A solicitor would be looking at the legal method rather than regulatory method.

under the limitation act 1980, professional negligence claims have 3 rules

1 - Primary limitation period - under contract law - 6 years from date of the event/sale.   Or under tort of negligence it is 6 years from the date of loss.

2 - Secondary limitation period - Three years from the date of being aware of potential negligence.

3 - An absolute long stop of 15 years for professional negligence claims.  

So, as we are in 2021, you would be looking at 2006 or later.  

The investment was a unit trust with the financial arm of a bank.

This is important as banks dont tend to activate the timebar on regulatory complaints (probably would on legal claims).

My questions are:-
Is it possible to claim for bad advice during the period of holding the investment 
Is it possible to do it alone as solicitors take 40% + 8%vat.
Is there a template/set of questions to ask the institution to ensure success. 

A solicitor pricing it at 40% indicates a low success rate or greed.

Remember that the regulatory complaints process is free of charge to use.    

<div>We explained we had read about a possible crash yet were still recommended to buy them.</div><div>No we didn't read about it then buy them. We already had them "then" read about a possible problem. We explained this to the adviser and was advised it's ok don't worry keep them. That's the "bad advice" I meant</div>

That is not a valid complaint reason.  A crash is always coming.  Crashes are part of parcel of investing.   I could tell you today that one is coming. or tomorrow or next week, next month or next year.  When a crash occurs, another one is coming.

Being told not to worry about crashes is correct.   Most crashes recover within 6 months.    The extreme ones generally take no more than several years.   Best advice is to sit tight, don't look at your values and wait to come out the other side.

edit due to new post:

We already held the unit trust. My ex read about a possible problem with technology investments. He asked the adviser about this but was encouraged to do nothing.

How long ago was this?   What evidence exists that advice was sought and given?

Thrugelmir

durali said:

Sorry my original post is misleading.

We already held the unit trust. My ex read about a possible problem with technology investments. He asked the adviser about this but was encouraged to do nothing.

What was the possible problem that your ex foresaw?  The winners were companies such as Apple, Microsoft and Amazon who 20 years later would have have made you handsome profits.  No one foresaw this back then. 

csgohan4

it's no wonder, IFA fees are high and compliance is OTT, to reduce the risk of litigation in the current age. I expect every IFA worth their weight, to put a disclaimer that their investments would go down as well as up. They are not soothsayers and predict the future accurately. 

Will depend on how risky you wanted to be. Clearly investing in tech at the time seems a risky strategy, than if it was in a vanilla index tracker. Just because you can't remember the warnings your FA may have told you, doesn't mean they weren't mentioned either verbally or in writing. 

In any case they are time barred now

jimjames

durali said:

Sorry my original post is misleading.

We already held the unit trust. My ex read about a possible problem with technology investments. He asked the adviser about this but was encouraged to do nothing.

So are you now saying that you already held the investments (not shares but a unit trust) and were not advised to buy them by the bank. After buying them already you then asked the bank adviser whether you should keep them?
That is a completely different scenario from being advised to buy them by the bank in the first place so can you confirm which is the actual situation? Who advised you to buy them in the first place - anyone?

dunstonh

it's no wonder, IFA fees are high and compliance is OTT, to reduce the risk of litigation in the current age. I expect every IFA worth their weight, to put a disclaimer that their investments would go down as well as up. They are not soothsayers and predict the future accurately. 

I have had three complaints in just over 25 years.    

First one was adamant I gave him bad advice.  He accused me of saying a whole range of things.     The complaint was rejected (against me - I dont know what they did beyond that) as I was not an employee at the time of whatever it was he was complaining about and indeed, I would have been 15 and still at school.

Second one I never did any business with. Just an initial meeting which is the informal meet and greet and see if its worth working together or not.  It wasn't and it never went beyond that.  They were employed but were thinking of having a career break in later years.  I told them that if they did, they should stop their pension contributions as they would not be eligible to make them.     About 4 years later they wrote to my employer asking them to pay their HMRC penalty charge and the cost of their pension contributions as HMRC had written to them for making unauthorised contributions.    So, they had ignored what I said but wanted my employer at the time to pay for it.   They never employed us (so no terms of business) and never paid anything and no advice was given.   However, luckily, I had kept a copy of their payslip stapled to the factfind along with a written note saying that I had checked their pension eligibility and it was ok for the current year but they were considering a career break in the future and that I told them that they would be ineligible to make pension contributions if they did that and they should stop the pension before they go onto the career break.     It was a complete try-it-on and was rejected.  But thankfully, my audit trail covered me.

Third one really hit me hard personally.  It shook my faith in people and made me a lot more cynical. I found it difficult to work for about 4-5 months.   Looking back with hindsight, it caused what would be classed as depression today.   It was similar to what the OP is complaining about.  Markets went down, I told the person that it happens periodically and reiterated what I had shown them previously with market falls and they knew drops would happen and that they should wait it out.  I used to see him often and he would comment on the markets and how they went up or down and all quite normal.   Then I stopped seeing him (he lost his job) and he didnt contact me and he wasn't an ongoing servicing client.   But a complaint came in. It was full of lies.   He claimed he was never told his money would go down as well as up and I told him to stay to stay put.  I had told him to stay put but I had also explained and shown him how things go down in good detail.      The complaint took a long while to get to outcome.   It turned out he went direct to provider during the downturn and went into drawdown.  Most of the fund had recovered by the time it was rejected.  About 5 months and 20 days later, he referred it to the FOS.  I dont know the outcome as I left that employer to set up my own company by then.   

For a number of years, we were shown complaints and outcomes to help with how best to document things.  We were frequently told that most complaints were either encouraged by third parties with a vested interest (CMCs for example), try-it-ons because there was no cost to trying to get compensation or poor recollection.      The aim was to get us to improve our record keeping and information.

My own experiences are not favourable for consumer complaints and people forget the mental health damage that a try-it-on complaint can have on an individual.