We are a dedicated claims management company specialising in financial mis-selling within the Irish Financial Services Sector. Our aim is to provide a solution and service to the thousands of consumers who believe they have been mis-sold or misinformed when obtaining financial products and services.

 

Finance Claims have done in a few weeks what I was unable to achieve in 18 months. They are knowledgeable, professional and kept me updated throughout. I would definitely recommend their services to my friends and family

Mrs O’Sullivan

 

Mis-sold Investments

  “Billions of pounds up in smoke after the collapse of several banks”

Have you lost money on your investments, even though you were advised that they were “safe”, “low risk” or perhaps “Guaranteed” or “Protected”?

If so, you might have a valid claim for financial compensation. There are many investments available to retail investors, but one type that has come to the fore over recent years is the investment plan known as a Structured Product, Capital Protected Plan or Guaranteed Investment Bond.

 These investments are sold by advisers as a “packaged product”. They appear fairly straightforward and often have predetermined rates of return, or minimum maturity values. They can be structured for high risk, or low risk, investors but in the past few years many advisers have been selling them to low risk, and even risk adverse investors.
 Some plans are suited to low risk investors, but there are many that are not. The financial meltdown that we have witnessed across the globe over the past few years has exposed the true risk of some plans, which has resulted in many people losing tens of thousands of pounds (in some cases hundreds of thousands). Whilst such an investment can have a place in an investment portfolio, it is essential that your adviser explained the risks and structured your money so that you do not „put all your eggs in one basket‟.
 There have been some cases where an adviser put all of a person’s retirement savings into one plan – this is grossly negligent and no professional adviser should do this.

Negligence means responsibility, so we can claim compensation where it is clear that your adviser has either not acted with due care, not given suitable advice to reflect your circumstances or not explained the risks involved.

 If you have a large amount to invest, then it should be split between different investment types and providers to ensure you are not overly exposed to the failure of one or two plans. If you have little to invest then you should not really be exposed to a significant potential loss should the investment fail. Unfortunately, many investors put too much in one plan, or with one provider (i.e. several plans but all exposed to the failure of one issuer/bank).

 Often, the reason why only one investment provider is chosen is that it reduces the administration burden for the adviser and also reduces the need for him/her to understand the whole range of plans available in the market (which is a demanding requirement and often not feasible for a small firm of advisers, especially given that many are one or two man bands). An Independent Financial Adviser should give you suitable advice with due regard to the whole market, not just one or two providers and it is a failing if they do not.

So where is the risk? Well, when you invest in these plans, in many cases (though not all) your money is being lent to the plan issuer (often a bank,). The issuer then offers to repay your money at a future date (hence why they are often called capital protected), often between 3 to 6 years in duration, along with a profit that is linked to an underlying investment. The two main risks are:

1) The plan issuer gets into financial trouble, perhaps though mismanagement, and is unable to repay your money at maturity. They will then be in default and most likely bankrupt. This means that you may not get any of your money back, or, at best, a heavily reduced proportion. In such a situation, your “protected” or “guaranteed” investment is no longer as described and you suffer heavy losses that are not consistent with a low risk tolerance.

2) Although most of the money is loaned to the plan issuer, there is usually a portion that is used to invest in financial products, known as derivatives, which give the potential profit element of the investment plan. For example, if your plan is based on the FTSE-100 stock index rising, then there will be a derivative issued by a “counter party” (often a bank) which promises to pay the defined returns at a given level of performance of the index. The risk is that the “counter party” issuing the derivative gets into trouble and is unable to honour the derivative contract. You would then lose the value of the derivative and any of the gains initially promised. The level of security depends on the current financial strength of the issuing company and any counter party. You also have to take a view on what the future financial security will be throughout the term of your investment
If you feel as though you have been mis-sold an investment or misadvised then contact us now.

Income drawdown

Were the various risks explained? Has your income had to be reduced due to poor market conditions or because the maximum income level has fallen?
Were you aware of these risks?

No ongoing reviews

Does your adviser provide at least an annual review? If not, you could be paying for a service not being provided without even realising it, as many investment and pension funds pay a “trail” commission to advisers each year, which is supposed to cover the cost of reviewing your arrangements. The economic environment and your personal circumstances can change frequently, so regular reviews are often appropriate.