Case for mis-selling of investment?

eiregal

Frequent Poster
Messages
210
Think this is the right forum..

Last year my then 60 year old mother came into a small bit of money and went to her bank for advice as to what to do with it. She was advised to invest in the Trilogy II fund. The FA painted a great picture for her, telling her she could take her interest earned every year for holidays etc. and still have her capital intact. Not once did he ever say the word 'risk'. The value of her fund and since decreased a fair bit. She has spoken to the bank about it who are now telling her it's a five year investment. Not once did the original FA mention 'five year investment'. Does she have a case for misselling of this product? If she had know it was a five year investment, she would never have put all of the money into it, leaving her without anything in the interim. As she has said herself, she's 61 now and could be dead in another 4 years. It's coming between her and her night's sleep now.
 

ClubMan

Frequent Poster
Messages
43,880
If you/she are/is not happy then make a formal complaint in writing to the company in question. If you don't get a satisfactory response then take the matter to the FSO.
 

eiregal

Frequent Poster
Messages
210
Thanks, that's what we plan to do. My mother has a call into the bank and is waiting for them to phone her back. Just wonderered if people had experience of it or thought she had a chance of getting her money back.
 

eiregal

Frequent Poster
Messages
210
Don't know what she signed but doubt she would have read it. She would have taken the FA at his word and trusted him. She's been with this bank all her life and is loyal to them. I know it would have been up to her to read it but the FA should have been upfront with her.
 

PMU

Frequent Poster
Messages
981
I don’t see about what you are complaining. A 60 year old today (who is a non-smoker) has a one in four chance of living until they are 90. If your mother lives to close to that age medical science will have moved on in the intervening period to possibly increase her chances of surviving longer. Therefore, the chances of her being dead in 4 years are not that great (unless she’s lived the high life in the past). So your mother has a very long investment horizon and a product such as the one you mention would not by any reasonable standard be regarded as inappropriate. Neither is there any evidence from your post that the FA breached the bank’s rules on selling investment products, or thath there were more suitable investment products available that the bank did not offer. Investment products of this type are typically regarded as requiring a 5 year period before they start to show gains. Perhaps the product wasn’t that well explained, but your mother did go voluntarily to the bank and so must take some responsibility for the risk involved in this investment decision. If she has a pension or expects to get one she is already covered for longevity risk, so she should just sit back and await her returns on this investment.
 

eiregal

Frequent Poster
Messages
210
I'm complaining about the fact that the FA didn't explain the rist involved. Nor did he mention it was a five year investment.

Investment products of this type are typically regarded as requiring a 5 year period before they start to show gains.
How was my mother to know that?
 

ClubMan

Frequent Poster
Messages
43,880
Thanks, that's what we plan to do. My mother has a call into the bank and is waiting for them to phone her back.
If you have decided to make a complaint then forget about phoning. Write a letter clearly setting out your complaint and what sort of remediation you expect. See how that goes and take it to the FSO eventually if necessary.
 

eiregal

Frequent Poster
Messages
210
Thanks again Clubman. The branch manager said he'd get the FA to ring my mother and talk through what happened so that's who she's waiting to hear from. We'll take it further after that.
 

ClubMan

Frequent Poster
Messages
43,880
I have read this 5 times and it still makes no sense to me, please explain
Many people often use the rule of thumb that it only makes sense to invest in equity based investments for 5 (or maybe even 10) plus years after which they might be expected to show reasonable gains. Ultimately the longer you can invest for the better when it comes to equities.
 

Dave Vanian

Frequent Poster
Messages
608
PMU's explanation above will hold no water whatsoever with the Financial Services Ombudsman. Have a look at some of the judgements on his website.

If the risk wasn't clearly explained and documented, there's a cse for mis-selling. End of.

If the FA manager rings back, make sure that she insists that he follows up with a letter confirming everything he's saying.
 
I

iggy

Guest
Don't know what she signed but doubt she would have read it. She would have taken the FA at his word and trusted him. She's been with this bank all her life and is loyal to them. I know it would have been up to her to read it but the FA should have been upfront with her.
Maybe you should have gone with your mum if she was not able to understand the product she was being sold. I think it`s unfair to blame the FA in this instance, if the investment had gone up I`m sure you wouldn`t be bothering to get in touch with the FA to thank him/her?
 

eiregal

Frequent Poster
Messages
210
if the investment had gone up I`m sure you wouldn`t be bothering to get in touch with the FA to thank him/her?
Well, no, because this is what he led her to believe would happen, so she wouldn't have thought anything of it. It was up to the FA to explain the product he was selling her. Granted, she should have known what she was signing but in reality not everyone does that. Having dealt with them for years, she trusted them.

Had she known it was a five year investment, she would only have put away part of the money and kept the rest in an easily accessible risk free account.
 

gebbel

Frequent Poster
Messages
1,005
Had she known it was a five year investment, she would only have put away part of the money and kept the rest in an easily accessible risk free account.
I understand your frustration but I'm also sure that the term of the investment would have been clearly explained in the T&C's, your mother should have familiarized herself with all details before signing. She should also have been accompanied by someone with a bit of savvy in this area.
 
Z

z101

Guest
Could have should have would have!! If she feels FA did not make her aware on the possible downsides then they clearly took advantage of her naviety in these matters. Only yesterday we seen where the financial ombudsman had to get involved with financial institutions who behaved untoward.
Write them a very strongly worded letter and then take it further if the reply is not satisfactory. Detail absolutley everything clearly. Dont let them off the hook if your Mother believes she was wronged.
 

tink

Frequent Poster
Messages
163
I don't think you will get much joy from Ombudsman, in all liklihood the FA issued all the correct docs which will have said your investment may fall as well as rise etc and can prove so, unfortunately your mother cannot prove what was said in a verbal communication. I understand she trusted him but he will have covered himself by sending everything in writing which didn't read, he will have covered himself. Also doubtful as your mother has quite a good life expectancy these days so will not be seen a a ridiculous investment as she is not even retirement age yet. Best of luck though..
 

eiregal

Frequent Poster
Messages
210
Just an update on this situation. After much correspondence to the bank, my mother finally met with the Area Manager yesterday. The bank have agreed to give her back the full amount she invested, plus interest she would have earned had she had the money in a regular deposit account (which will be very little I would imagine). The AM conceded that she should not have been advised to invest all of her money in the fund. Seemingly the FA whom originally advised this thought that she had another fund of the same amount on deposit, which he called the 'emergency fund'. Funnily enough there's nothing in his notes on her file stating this. Anyway, she'll have the full value in her account within the next few days. The original amount was €30k and the current value is in the region of €15k so the bank are taking the hit of c. €15k. Needless to say my mother is thrilled.
 
Top