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‘Barclays has made me a poor pensioner’

Campbell, wearing the “Barclays eat wealth” hat, says: ‘The bank’s treatment of its clients is appalling’
Campbell, wearing the “Barclays eat wealth” hat, says: ‘The bank’s treatment of its clients is appalling’

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.

How Money Marketing revealed the Barclays story in April 2009 (right) and  ast week’s cover as the protestors march on Parliament
How Money Marketing revealed the Barclays story in April 2009 (right) and ast week’s cover as the protestors march on Parliament

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.”

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Comments

There are 20 comments at the moment, we would love to hear your opinion too.

  1. What have the FSA done about this?

    The FSA have FIVE statutory objectives. It is the reason they exist – why they are paid.

    http://www.fsa.gov.uk/Pages/about/aims/statutory/index.shtml

    TWO of the FIVE are:

    “Consumer protection”. Well, they get a big FAIL for that in this circumstance. They have not only FAILED to ensure consumers are protected in advance of these events, they have done nothing to protect them after the event.

    The other relevant objective:

    “Market confidence”. How can a general consumer have any confidence when they, yet again, see a bank riding rough shod over their customers. A bank that would not exist if the system had not been bailed out by the tax payer. A system that FAILED because the FSA FAILED in its primary objectives.

    What are they doing about this?

    Nothing – but it’s a big bank and they have more expensive lawyers than the FSA.

    What a total, embarrassing, pitiful, ridiculous, expensive, joke.

  2. Julian Stevens 30th July 2010 at 4:26 pm

    The FSA has made me (and many thousands of others) a poor IFA.

    That aside, the FSA’s steadfast refusal to take action against Barclays constitutes dereliction of duty almost beyond comprehension.

    Yet all Mark Hoban does is to keep trotting out the same old lie that the FSA is independent of government, so there’s nothing they can do about it. Sickening.

  3. Jennifer Nicholls 30th July 2010 at 4:27 pm

    What a disgrace. I must admit even when I worked at HSBC, Lloyds and Abbey this would never have been done. It is an outrage.
    Barclays wealth department should be put out of business. Anyone else would have been closed down for this. Come on FSA, have you got the back bone. I doubt it.

  4. Together with shared appreciation mortgages
    this mis-selling warrants an appearance before the Treasury Select Committee by the Board of Barclays.

  5. Prosecute Barclays – simple as that. A civil action could even go so far as to name the FSA as a second defendent.

    Govt could always bring in retrospective legislation to put FSA in the firing line.

  6. The idiots at the FSA who do nothing about this,walk amongst us. Absolute cretins.

  7. The dismissal of the FSA may have help but the new regulators, are the old regulators, but for a coat of paint.

    The Bank of England hopefully knows what it is getting control of.

  8. I don’t know why you are all moaning about the inaction of the FSA. It happens everytime there is another disgrace from the banks.

    Reason why? Well nearly all the FSA staff came from the banks, and nearly all of them will step back into lucrative cushy jobs in the banks when they have done their undercover work in the FSA. They are never going to mess with their future employment arrangements.

    It always has been and it always will be a scandal, that the public will never really be told about.

  9. Scandalous! What are the FSA doing about this. Do they want the names of the individual advisers so they can ban them from the industry? I think not. If it were me they would remove my licence, fine me £800,000 and excile me on the island of Melba for 10 years.

  10. This is not the first instance of Barclays wrongly labelling an adventurous fund as a balanced fund, or a balanced fund as a cautious fund.

    The blame lies with whoever it was a Barclays who put the Global Balanced Fund onto the “balanced” panel for the advisers to use.

    However the advisers themselves and the IFA sales people at Aviva must also take their share of the blame for not questioning why a fund containing such a high percentage of global equities could be deemed to be “balanced”.

    One also wonders why so many pensioners ended up being identified as having a balanced attitude towards risk.

  11. Well what do you expect from Barclays and Aviva – A Deal ??? much more of a Steal !
    They ride rough shod over the little people and little businesses.
    Wake up and smell the Coffee.
    The FSA seem to have no control or interest in either groups either, even their own members receive no assistance.
    This is fraud and theft no more no less.

  12. The FSA like to talk about ‘Treating Customers Fairly’ but when it comes to doing instead of talking, they are completely out of their depth.

  13. This is systematic of bank employees forced to take massive commissions to support their “salaries”. I honestly believe the FSA think that bank “advisers” get these salaries and other perks irrespective of the commission they generate.

    Through a professional connection I am introduced to people who have received compensation and need advice. Unfortuantely in a lot of cases the bank gets there first when they bank the cheque.

    In the most recent case the bank “adviser” invested 50k in Scottish widows Capital Protected fund and was told the capital was “100% secure” to add insult to injury the bank “adviser” took 7% commission.

    But of course the FSA do not investigate individual complaints and when you try to explain to them that it is a systemic failing they are not interested.

  14. I can’t see why anyone is shocked by this story. It’s mild next to what we asked to do when I was an IFA with a large building society a few years back.
    Internal pressure by middle management on poor young advisers who need to keep their jobs. An investigation will show nothing in writing – it’s all done by conference calls and then individual menacing calls to any individual who won’t comply.

  15. Giving advice without factfinds? Barclays obviously have no actual control of their staff. Where is the compliance? Again amateurs in the field of investment proporting to be their for their customers.

    The FSA … to busy counting their pension entitlements and looking out over the water of Canary Wharf.

  16. Crazy gang IFA member 2nd August 2010 at 11:08 am

    Agree with Brendon. This is just amazing!! Yes the person at Barclays who wrongly labled the fund ‘cautious’ is to blame, but so are the many bank advisors who dont even check the makeup of a fund before recommending it to a client and just went ahead and recommend it. It just goes to show that we actually work in parallell universes. The Tied agents and Independant advisers. It just amazes me that following all the RDR and treating your… etc etc we still have a situation where a bank advisor can simply point at a product and fund and not have to make or show any comparison with the market. Good for us though!! Oh and the FSA have long been the bank’s poodle, so dont expect any real action from them. Turkeys dont vote for Xmas.

  17. is this now closed for comments

  18. Time is running out for people to realise that in the vast majority of cases, if they deal with the banks, they will be taken for a ride.

    What can the FSA do about this if Barclays’ compliance process deemed the advice process fair and that it was a medium risk fund? Plenty of Accountants (who pretend to be financial planners) also got told off for recommending the same fund, but no direct FSA action was taken against them.

    If people continue to trust banks and refuse to pay for fee based financial planners, they have, to a large extent only themselves to blame.

  19. This is news? In 1993 I reported them to the SIB (now FSA, soon to be something else), what did they do?

    Did the same in 1994, 1995… er… well you get the drift.

    Same goes for Allied Crowbar, Shabby Life, Midland….. the list is endless but what do the regulators do? They look the other way, I put it down to a conflict of interest but what will Hoban do? Nothing.

    The RDR pays right into the hands of the big boys.

  20. Barclays has revealed that its half-year pre-tax profits soared 44 per cent to £3.9 billion as a bumper bank reporting season continues

    So who was it that said Dishonesty Doesn’t Pay ??

    One has to wonder how much of this profit can be allocated to Mis-Selling ??

    Barclays have many questions to answer but who has the power or interest to insist on answers ?

    answers on a postage stamp !

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