Wrong advice from bank on Investment
gran_in_space
Posts: 30 Forumite
Hi there,
Need some help and advice if at all possible please? Our bank did a review of an investment they recommended (PIP) in 2010 and have written to us that they in fact didn't consider one of us was a non tax payer when recommending this product (even though their advisor was informed) and through this we could have been financially disadvantaged.
With this investment in joint names instead of it being in the sole name of the non tax payer we could have claimed all the tax back, instead now only half of the tax could be reclaimed. They state they should have recommended a different investment in sole name of the non tax payer an (OEIC) which would have meant all tax taken could have been reclaimed (before 6th April 2016 when the new Personal Saving Allowance came in and counting towards the Personal Allowance).
If the bank has deducted more tax than should have been paid by us, they have said we may be able to reclaim from HMRC all or some of the tax deducted. According to our bank, the advice they gave us may not have been appropriate for our circumstances but we would have to deal with HMRC!
They have calculated a figure of loss we could have made on our present investment compared with the product we should have had. They also state they will offer to pay us compensation based on their calculation of the loss and waiver of early withdrawal charges. They have given us four options to choose from as to what we can do with this investment now.
We have tried to arrange an appointment at our bank for someone to discuss all this with us face to face but they don't have advisors now apparently. Neither can the investment fund people advise, they will only discuss over the telphone. We have explained we have problems (hearing and voice loss) and cannot deal with such matters on the phone. They have in effect left us to sort it ourselves.
How do we know their calculated figures of loss (and the compensation they will offer) are correct especially as they advised us wrongly in the first place? Can anyone please advise what two elderly and disabled people can do to resolve/deal with this problem without further being disadvantaged by the bank's obvious inadequacy in the first place. Thanks in advance for any help/comments.
Apologies for lengthy post and hopefully not a too confusing one.
Need some help and advice if at all possible please? Our bank did a review of an investment they recommended (PIP) in 2010 and have written to us that they in fact didn't consider one of us was a non tax payer when recommending this product (even though their advisor was informed) and through this we could have been financially disadvantaged.
With this investment in joint names instead of it being in the sole name of the non tax payer we could have claimed all the tax back, instead now only half of the tax could be reclaimed. They state they should have recommended a different investment in sole name of the non tax payer an (OEIC) which would have meant all tax taken could have been reclaimed (before 6th April 2016 when the new Personal Saving Allowance came in and counting towards the Personal Allowance).
If the bank has deducted more tax than should have been paid by us, they have said we may be able to reclaim from HMRC all or some of the tax deducted. According to our bank, the advice they gave us may not have been appropriate for our circumstances but we would have to deal with HMRC!
They have calculated a figure of loss we could have made on our present investment compared with the product we should have had. They also state they will offer to pay us compensation based on their calculation of the loss and waiver of early withdrawal charges. They have given us four options to choose from as to what we can do with this investment now.
We have tried to arrange an appointment at our bank for someone to discuss all this with us face to face but they don't have advisors now apparently. Neither can the investment fund people advise, they will only discuss over the telphone. We have explained we have problems (hearing and voice loss) and cannot deal with such matters on the phone. They have in effect left us to sort it ourselves.
How do we know their calculated figures of loss (and the compensation they will offer) are correct especially as they advised us wrongly in the first place? Can anyone please advise what two elderly and disabled people can do to resolve/deal with this problem without further being disadvantaged by the bank's obvious inadequacy in the first place. Thanks in advance for any help/comments.
Apologies for lengthy post and hopefully not a too confusing one.
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Comments
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It's not unreasonable for you to want to validate their calculation so reply to their letter with your questions and see what they come back with. Once you get an answer you could post on here and members may be able to offer independent advice on whether or not it sounds realistic, or if it's a significant enough value then consult an IFA....0
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With this investment in joint names instead of it being in the sole name of the non tax payer we could have claimed all the tax back, instead now only half of the tax could be reclaimed.
Non tax payers have not been able to claim the tax back on dividends since around 1999. Only on fixed interest securities can the tax be claimed back.
Also, on a joint holding, 50% of the interest tax (if there is any interest) can be claimed back.We have tried to arrange an appointment at our bank for someone to discuss all this with us face to face but they don't have advisors now apparently.
Most banks have pulled out now. If you want advice see an IFA (which is what you should have done in the first place). No doubt the bank didnt provide any further advice to bed & ISA each year until everything was in ISAs (something an IFA would do).How do we know their calculated figures of loss (and the compensation they will offer) are correct especially as they advised us wrongly in the first place?
They normally provide a breakdown. I suspect you are actually going to end up with more than you really should have. I would not be surprised if they do not take into account that only 50% of it should be redress but do it on the whole amount. Also, to be honest, it is a very harsh decision on their part. It's not something that you would normally see a complaint upheld for. However, an independent checker (as this was a S166 review) has decided to flag it. Possibly as there was no ongoing servicing and it was a one off transaction.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Thanks for your answer dunstonh. Been unlucky in the past with IFA's (our luck!) so really don't know how to choose one now. We still have to decide options and with all that's gone on we MAY consider shutting this one down and putting into ISA's or anything without as much risk as this is.
Too old now we think for trying to understand complicated financial things but of course not made the decision as yet. So much to think about and really needed the bank people to explain it to us seeing that it's their product. The value of this is about 25k total so thankfully not like some that people have, but enough to for us worry about.
We didn't instigate the review so we are thankful they did it for whatever reason. I guess we won't find out if the final figures and compensation is a true reflection of what should be paid as it will need us to stump up more cash to find out using independent advice. Of course once we accept their offer that's it so am finding it very stressful trying to decide especially without their help (or am I being unreasonable...).
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Too old now we think for trying to understand complicated financial things but of course not made the decision as yet. So much to think about and really needed the bank people to explain it to us seeing that it's their product. The value of this is about 25k total so thankfully not like some that people have, but enough to for us worry about.
Really crude calc but you can use it and adjust your figures to match. £25k split in two (so 50/50 split for tax) is £12,500. If say 30% of that is in fixed interest securities then that is £3750. £3750 with an interest yield of 3% is £112.50. 20% of that in tax is £22.50.
So redress would be approx £22.50 for each year it was in force on those figures. Plus 8% simple interest.
Your fixed interest content could be more or less as we dont know the fund(s) you are in. But it will give you an idea.I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
I find it hard to understand how Gran could have been 'unlucky' with their IFA! They are well qualified and explain their recommendations so well you couldn't possibly complain about bad advice.
Maybe it was a simple misunderstanding and not bad luck.
Good luck in the future fj0 -
bigfreddiel wrote: »I find it hard to understand how Gran could have been 'unlucky' with their IFA! They are well qualified and explain their recommendations so well you couldn't possibly complain about bad advice.
Maybe it was a simple misunderstanding and not bad luck.
Good luck in the future fj
Why...just why?0 -
Thank you for that dunstonh I haven't got time atm to give any further details but will try to get back later to give a few more if I can.0
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bigfreddiel.....Probably a misunderstanding with one of them on our part as we needed more simple advice which we didn't find with this guy. Another one detailing income was actually adding premium bond wins to our yearly earnings! We didn't think that was correct along and with other things he didn't seem to know a lot about... we didn't go back. We don't know how to choose an IFA it seems!0
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Why...just why?
Presumably because he thinks he is being clever.
The problem, as someone has already pointed out on another thread, is that while we regulars know bigfreddiel's opinions on IFAs, and are well aware that his recent posts say the opposite of what he thinks, :mad: newer members take him at face value.
Any post of his concerning IFAs should come with a huge Beware:exclamati0 -
Presumably because he thinks he is being clever.
The problem, as someone has already pointed out on another thread, is that while we regulars know bigfreddiel's opinions on IFAs, and are well aware that his recent posts say the opposite of what he thinks, :mad: newer members take him at face value.
Any post of his concerning IFAs should come with a huge Beware:exclamati
Sorry, but I've been researching IFAs and I realise how wrong I was.
They are well qualified and can be trusted to give excellent advice. You would have to be really unlucky to find one that gave bad advice, or overcharged, or want very clear in the advice they sell.
So I've changed my mind now, if you don't have the time or knowledge to DIY pay an IFA, it will pay off in the long run.
Good luck Gran, cheers fj0
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