An IFA has hit out at NatWest for advising a pensioner who did not want to put capital at risk to invest £140,000 from the sale of her house in funds that fell by 30 per cent in two years.
Euro IFA adviser Ken Hopkins says the client sold her house for £140,000 in 2006. In September the same year, she saw a NatWest adviser who recommended her to invest £100,000 in a Fidelity FundsNetwork bond.
Within the bond, the money was split equally between two life funds, the Standard Life ethical fund and the F&C stewardship income fund. The adviser recommended the client, aged 69, to invest the remaining £40,000 in the Aegon ethical corporate bond fund, with £7,000 of that in a maxi Isa.
The total investment represented 97 per cent of the client’s total assets. Hopkins says the client did request ethical investments but she made it clear that she did not want to risk her capital.
Hopkins says: “Her sole requirement was the security of her capital and the certainty that it would provide the additional income she needed to pay rent on her new home. She was not looking for capital growth.
“For the adviser and then the NatWest complaints’ department to seek to justify putting more than 97 per cent of a 69 year-old, single, non-taxpayer’s total assets in unit-linked pro- ducts is ludicrous.”
A NatWest spokeswoman says: “The bank has carried out a full investigation into this complaint, including the suitability of advice given, and we reject any suggestion that our advice was unsuitable.
“Information provided by the customer in 2006 showed that she was a taxpayer and that her overall attitude to risk was medium. The advice provided and subsequent agreed funds elected were consistent with her risk appetite and her circumstances at that time.”
Hargreaves Lansdown head of financial practitioners Danny Cox says NatWest’s documentation made it clear how the money was being invested but the investments were not suitable.