What is a group of pensioners to do when they lose up to half their life savings after taking advice from Barclays but are struggling to get help from the bank, the FSA or the FOS?
The answer is to march on Parliament, as around 80 former Barclays investors did last week to lobby MPs for help to recover hundreds of thousands of pounds they invested in the Aviva global balanced income fund.
In April last year, Money Marketing revealed that Barclays advised some cautious clients approaching or in retirement to transfer their long-term savings into the single specialist fund.
The value of the fund plunged by almost 50 per cent in the 12 months to March 2009 and the bank admitted it erroneously categorised the fund as balanced rather than adventurous between July and November 2007.
Last week Money Marketing revealed that Barclays has now agreed to fast-track the backlog of complaints currently with the Financial Ombudsman Service over its sale of the fund and says the majority of complainants should receive compensation in the next three weeks.
Prior to Barclays’ pledge to fast-track all remaining complaints, the BBC picked up on the investors’ plight and highlighted the bank’s poor advice on its Money Watch programme last week. The programme interviewed many of the investors whose stories Money Marketing has profiled. Also, scores of investors gathered at the Houses of Parliament to tell MPs about their losses.
Conservative MP for Wimbledon Stephen Hammond chaired the meeting in the House of Commons after a constituent, Lona Fudge, wrote to him after she lost half of her £108,000 investment in the fund.
Fudge says she was contacted over the phone by a Barclays adviser who told her that the only way she could take an income from her savings was to cash in her Peps, Isas and L&G bond and invest in the Aviva global balanced income fund.
She said there was no factfind, the adviser did not offer any alternative investment options and he failed to tell her that there was a risk that she might lose some of her capital.
She said: “I invested £108,000 in 2007 and by February 2009 my investment was worth just £54,000, even though I told Barclays that I did not want to risk my capital.
“This money came from the death of my husband and it is supposed to be for my retirement but now I have to rely on my sister for support. Barclays has made me a poor pensioner.”
Other investors at the meeting told of similar experiences. Many said they have been banking with Barclays all their lives and trusted the bank to do the right thing with their money.
One investor said: “I was stupid enough to believe Barclays. Like many of you, I had banked with them for years and now I have lost £30,000.”
Steven Campbell is a retired film director who invested £250,000 in the Aviva fund in 2007 following advice from a Barclays adviser.
Campbell says Barclays contacted him offering advice after he deposited £350,000 from the sale of his London house. He told the bank he wanted an income to look after his daughter, who was nine years old at the time.
He said: “I had no idea about money, I just trusted Barclays to do the right thing but it turns out I would have been better off putting the money under my mattress.”
Campbell has left his money in the Aviva fund and it is now worth just £150,000.
He said: “Barclays’ treatment of its clients is appalling, there has been no customer service at all.”
CLAIMS senior partner Paul Cooper says the Government has got to be aware that the big banks are not looking after customers.
He says: “Barclays advisers have churned clients into this fund and all the advisers are worried about is earning commission. I hope the Government makes the Consumer Protection and Markets Authority a very strong agency and makes sure the people there are not just pen-pushers but actually go out into banks and find out what is really going on.”
Hammond urged investors who have lost money because of Barclays’ advice to contact their MP.
Other MPs that attended the meeting included Conservative MP for Daventry Chris Heaton-Harris and Conservative MP for Mid-Norfolk George Freeman.
Heaton-Harris told investors that MPs will be raising the issue in business questions in the House.
He said: “Barclays are trying to settle a lot of investors outside of the judicial process which suggests that they have a reason to do so. I would be surprised if Barclays did not do something off the back of this because it is horrifically embarrassing for them. Hopefully, with a joint effort from a number of MPs, we will be able to do something about it.”
No one from Barclays attended the meeting but a spokesman says: “We are sorry for the stress experienced by some of our customers who invested in the Aviva funds.
“It is clearly evident that in some instances relating to these funds, we have failed to meet the high standards that our customers expect from us and for this we are sorry.
“As announced at the start of the meeting, Barclays decided it would be inappropriate to send a representative, as client confidentiality would have preven-ted us from discussing individual cases that are still being reviewed. We will, of course, take on board the feedback from the meeting and respond to customers accordingly.”