Have I Suffered from Mis Sold Investments?

Simply put, there are two reasons why people invest: for income and for capital growth. Why they feel the need to invest is a different matter: this can be for retirement, loan repayment, gifts to children, school fees or a rainy day provision, amongst other things. But we should all ask ourselves, have we suffered from mis sold investments?

With such important goals at stake and confronted with a huge choice of- often complex- investment products it is no surprise that people rely on the advice from banks and independent financial advisers (IFAs). And no surprise that thousands have suffered from mis sold investments over the years.

Indeed, the past thirty years has seen many mis-selling scandals where people have relied on the advice of banks and financial advisers only to lose considerable amounts of money. This was the case with endowment mis-selling, transfers out of S2P or SERPS, to today’s mis-sold mortgages and Payment Protection Insurance (PPI)

Suitability not performance

There have been few investments which have performed well in the past few years due to the global financial crisis and the ensuing economic problems.

However, the fact that your investment has lost value or the income which you received previously has reduced does not in itself mean that you were mis-sold.

However, if the bad investment that you were sold was unsuitable, then you could claim your money back!

FSA regulations demand that products recommended to you are suitable to your needs and circumstances. The adviser needs to take into account your:

• Age
• Occupation
• Financial circumstances
• Financial needs- growth or income?
• Tax position
• Investment diversification and asset allocation
• The period of investment

After the adviser has established your circumstances and investment needs, he should establish your attitude to risk. This is crucial, and one of the reasons why so many investments have been mis-sold.

An adviser, for instance, should not sell a high risk structured investment to somebody who is ‘low risk’ (somebody who is not prepared to risk losing any of the capital value of their investment). Unfortunately, this type of investment mis-selling has been widespread over the past decade.

The adviser not only has to establish your circumstances, needs and attitude to risk via a strictly regulated process, but also needs to take into account the features of the investment he sells you.

If the charges, term, risk, return do not suit your circumstances then the investment is unsuitable and you may be due compensation.

Do you think that you have suffered from mis sold investments; have been sold an unsuitable investment? Please call us now on 01442 825222 to discuss, click on the live chat icon below or fill out the form on your right.