Been mis-sold an investment? Don’t pay to make your claim
YOUR CONSUMER RIGHTS CHAMPION
SOMETHING unusual has happened to the way people manage their savings in the last decade – and we’re just beginning to see the effects.
People who only ever used to put their money in to savings accounts and high-interest ISAs have been forced by low-interest rates to take a chance on investments. But have they been given adequate warnings about the risks?
Regular readers will know that I’m not a fan of claims management companies. I’ve been particularly worried lately as these firms are aggressively advertising their services for mis-sold investments.
If you’ve lost out, don’t pay a firm to make your complaint – you can do it for free.
Many people have unrealistic expectations about their investments
– the average anticipated returns being around 10%.
These expectations are usually linked to low-risk investments and are hopelessly optimistic.
Greater returns are possible but are fraught with risk. If you’re taking out a high-risk investment, you’ve got to be prepared for losing some or all of it. Medium to high-risk investments are not for novices – and you can’t complain solely about underperformance because it’s not generally guaranteed. You can, however, complain about being mis-sold.
The rules around selling investments in the UK are among the most comprehensive on Earth.
The vast majority of financial advisers do a great job, but it pays to be completely honest about your inexperience if you’re considering taking out single or multiple investments.
A good adviser should suggest a balanced ‘spread’ of investments so any losses are outweighed by safer things like bonds and gilts. They should fully assess your financial situation, give you time to consider it and tell you exactly what to expect for the risk level you agree on.
If you’re looking for good, independent financial advice, speak to friends and family for recommendations. But be cautious and always check if the adviser is regulated and what other customers have said about them online.
Advisers used to make their money largely from commission, but the rules changed to stop that as there was an incentive for less scrupulous ones to go for policies that paid out more.
Now you have the option of paying the cost of seeing a financial adviser up front, on a percentage of what you invest or even hourly rates.
Financial advisers have to give you lots of information, including:
■ Clear details about how they will charge you for their services and what it will cost;
■ A key facts document that explains what they’re proposing you purchase;
■ An assessment of the suitability of the investments and the risks that you’ve agreed beforehand;
■ Time to think about it before signing up and details of your right to change your mind;
■ Details of their regulatory status and how you can make a complaint, and
■ Most importantly, you have the right to ask for further clarity if you don’t understand anything.
If you feel you’ve been mis-sold then all this information comes into play.
Make a complaint in your own words and explain what you were told and understood at the time. You’ve also got the free financial ombudsman you can go to if you’re not happy with the firm, and we can help you make a complaint for free at Resolver.
■ Find out more about your investment rights and making a complaint at resolver.co.uk