Financial Advisor Misselling - Any advice?

[Eastleigh Seagull]

Dear Financial Sages of NSC. My 92 year old grandad has just moved into a care home type thing and has finally asked for some help in sorting out his finances. Last year he sold his house and moved into a warden controlled type place leaving him with a chunky lump sum of cash that he wanted to invest.

He approached a major high street bank who said they couldnt deal with this in branch and they would send out an advisor to see him. Being a stubborn old git he didnt ask for any family/friends to sit in on the meeting and didnt actually tell us it was taking place. It now appears that this financial advisor sold my grandad a three year investment bond with massive penalties for early withdrawal into which he put a large five figure sum. He now needs this money to help pay for the care home he is in. But of course he cant get at the money.

My question is this - does anyone think that recommending and then selling a 91 year old a three year bond is slightly out of the ordinary? And if so how do I go about making complaints on his behalf.

Having quizzed my grandad about this (while he is in reasonable health he is now beginning to show the usual signs of forgetfullness and confusion) he said the 'advisor' put a lot of pressure on him and said this would he best option for the highest return. Now of course, this is hearsay so any complaint would have to be over the actual product sold but it has natually annoyed me has got himself upset and distressed over the situation.

Any advice or thoughts appreciated.

 

[Mellotron]

Surely he can take monthly income? That isn't encashment.

I work for Financial Advisers if you're wondering why on earth I'm piping up.

Sounds terrible if true that this FA has put your father into a high risk/high return bond considering the state of the economy.

 

[Eastleigh Seagull]

Hmmm - maybe my technical terms are wrong. Its something he bought early last year that promsies him - I think 6% return - with the money in its entirety locked up for three years. Havent got the paperwork yet to see what the penalties are if he tries to get the money out - or if he can at all.

 

[Mellotron]

Hmmm - maybe my technical terms are wrong. Its something he bought early last year that promsies him - I think 6% return - with the money in its entirety locked up for three years. Havent got the paperwork yet to see what the penalties are if he tries to get the money out - or if he can at all.

I would look into that. Very rarely are you disallowed from taking ANY income at all from a bond. Check this FA isn't being sneaky.

 

[Eastleigh Seagull]

cheers - will do. My understanding was that he could get out of the agreement but it would cost him a chunk of cash - ie he would have less than he put into it. It was more wondering if it is appropriate to advise someone in their nineties to lock up an investment for three years?

 

[Mellotron]

cheers - will do. My understanding was that he could get out of the agreement but it would cost him a chunk of cash - ie he would have less than he put into it. It was more wondering if it is appropriate to advise someone in their nineties to lock up an investment for three years?

I would definitely expect there to be early encashment penalties, and yes there's a very good chance of it being lower than the investment value anyway due to the market. Almost all investments put in force around 12 months ago will be unfortunately, so you may need to brace yourselves to be prepared for that.

But you could find out when the MVR (Market Value Reduction) applies until, and wait until that has gone before encashing.

Completely inappropriate. This bloke would've made a nice bit of commission off this and as far as I can see it was a terribly unethical thing to do.

Obviously I don't know the whole story, but I can only call it as I see it.

 

[readingstockport]

contact money box at the bbc, radio 4, they're are always chasing up on this type of thing.

And yes, it is definately misselling.

 

[Uncle Spielberg]

Banks are the worst culprits for mis selling. I am not going to comment on this case as I don't think we have enough facts but Banks have the highest percentage of complaints. Unfortunately the FSA and the bank stranglehold and monopoly now on the FS system means that IFA's and independants are leaving the industry in droves and soon the only choice clients will have will be with their Bank. Completely contrary to what the FSA stated they wanted but in reality better for them as its less work for them to do.

 

[Mellor 3 Ward 4]

Hope you get this sorted.

IMO the phrase 'Independent Financial Advisor' is complete bollocks - all they are interested in is what commission they can make out of selling you this/that policy.

Perhaps there are some good ones, but as they seem to make a living out of selling other Companies Policies (and getting commission from them) how can they actually be called Independent?

 

[Eastleigh Seagull]

Thanks a lot for the comments - so as a first port of call do I write straight to the bank that sold the product - or to the FSA - or one letter to both and copied to his MP for good measure?

 

[Mellotron]

Hope you get this sorted.

IMO the phrase 'Independent Financial Advisor' is complete bollocks - all they are interested in is what commission they can make out of selling you this/that policy.

Perhaps there are some good ones, but as they seem to make a living out of selling other Companies Policies (and getting commission from them) how can they actually be called Independent?

There are plenty of very good, very honest IFAs (my parents included) but yes the I is a half truth, as they still work under another companies' umbrella.

Any FA suggesting putting money into high return investments NOW is a complete moron.

 

[Mellotron]

Thanks a lot for the comments - so as a first port of call do I write straight to the bank that sold the product - or to the FSA - or one letter to both and copied to his MP for good measure?

Last option sounds best as you may waste time with the Bank (they'll say take it up with the FSA, vice versa etc).

 

[Mellotron]

Banks are the worst culprits for mis selling. I am not going to comment on this case as I don't think we have enough facts but Banks have the highest percentage of complaints. Unfortunately the FSA and the bank stranglehold and monopoly now on the FS system means that IFA's and independants are leaving the industry in droves and soon the only choice clients will have will be with their Bank. Completely contrary to what the FSA stated they wanted but in reality better for them as its less work for them to do.

I think you'll find mobile phone salesmen are probably the worst.

IFA business is absolutely booming at the FA's office where I work. Any IFAs here would be mad to leave now.

 

[Uncle Spielberg]

Hope you get this sorted.

IMO the phrase 'Independent Financial Advisor' is complete bollocks - all they are interested in is what commission they can make out of selling you this/that policy.

Perhaps there are some good ones, but as they seem to make a living out of selling other Companies Policies (and getting commission from them) how can they actually be called Independent?

You don't know much about the role of an IFA do you ?.

 

[Uncle Spielberg]

Someone making a living for giving a service and advice to someone, how DARE they

 

[Uncle Spielberg]

I think you'll find mobile phone salesmen are probably the worst.

IFA business is absolutely booming at the FA's office where I work. Any IFAs here would be mad to leave now.

I suppose because of the shit returns at the building society.

 

[Bozza]

soon the only choice clients will have will be with their Bank. Completely contrary to what the FSA stated they wanted but in reality better for them as its less work for them to do.

Assuming the number of product providers in the market stays the same (and mergers, takeovers and firms going to the wall are not a part of what we are discussing here), I do not see why IFAs leaving the industry leaves me with less choice.

I still have the same amount of choice. I'll just have to do a bit of legwork to do the comparisons required and go direct to the provider. But there still seems to be plenty of tools around that facilitate the comparison process.

 

[Uter]

Thanks a lot for the comments - so as a first port of call do I write straight to the bank that sold the product - or to the FSA - or one letter to both and copied to his MP for good measure?

Personally I would definitely contact the bank first if you haven't done so already. You should at least give them a chance to put things right before getting a third party involved. Besides which, you never know, they may agree with you that he should not have been sold the product in the first place.

 

[Mellor 3 Ward 4]

You don't know much about the role of an IFA do you ?.

As I said, perhaps there are some good ones - but please explain to me how can they be called Independent when they get a commission from the Company they recommend?

 

[Uter]

This is the Lloyds complaint procedure. Of course I don't know which bank your Grandfather was dealing with but I expect all the major banks have similar pages on their websites.

Lloyds TSB - Complaints procedure

It confirms that the financial ombudsman will only consider complaints once you have tried to resolve it with the bank in question, so you should definitely approach the bank first.

Good luck.