The Financial Ombudsman Service is warning companies not to rely on investor experience in misselling complaints.It says firms often cite the fact that the complainant has previously invested in similar products to claim they are experienced investors and should have been aware of the risks. But FOS chief ombudsman Walter Merricks says companies are often guilty of prejudging and that having some former experience does not make a customer an expert. The FOS cites a case where an IFA claimed that a widow who inherited a portfolio of shares from her husband was experienced in holding equities and it says that such arguments will not succeed. Investment experience is only one strand that the FOS looks at when investigating a complaint and it says circumstances recorded in the fact-find or client questionnaire, such as stated attitude to risk, can take precedence. Merricks says: “Firms should not prejudge individuals as experienced investors just because they may have inv- ested in endowments before. These individuals may not be aware of the risk posed by their previous investment or their circumstances may have changed.” But Fishburns Solicitors solicitor Clare Ward-Smith says: “The client’s investment experience does not usurp the function of the IFA but it is probably a factor that needs to be more heavily weighted by the FOS. The FOS seems to focus too heavily on the investor’s stated risk profile and often fails to look at experience.”
In my latest series of articles, I will be look- ing at the current state of investment markets, covering the main asset classes used in portfolio construction – cash, fixed interest, property (direct investment and property shares) and equities.
There was an 88 per cent rise in property prices in the top 20 performing university towns and cities in the past five years, compared to the UK average of 83 per cent, according to Halifax research.Out of these top performing universities, the research found Manchester recorded the highest property price growth since 1999, with […]
The AITC says quarter two investment trust Isa sales were down 10 per cent on last year from 21.7m to 19.6m. Global growth accounted for the highest proportion of Isa sales by sector followed by UK growth and income. The average investment by regular savers was 152 per month, while the average lump sum investment […]
New investors in the buy-to-let sector have halved in the past year, according to figures released by Mortgage Trust, but brokers say established landlords are ensuring that the market remains fluid.
By Jamie Clark, Business Development Manager With only a few weeks to go before the new pension freedoms allow people to access their pension funds as and when they like, there are concerns that the consequences of making (or not making) the right decision could put pension savings at risk. Yes, this revolution is exciting; […]
- Top trends
News and expert analysis straight to your inboxSign up
Latest from Money Marketing
Offsetting the cost of advice this way would benefit clients and advisers alike One of the multiple barriers to better take-up of financial advice is that some people are unwilling or unable to meet the upfront cost. In response to this, the government has allowed people to take small chunks (three lots of £500) out […]
Fund managers like to trade off having a unique style. There thousands of funds out there to choose from – the question I often hear from advisers is: what makes this person different? Sometimes this can be a really tough one to answer. “We invest for the long term” is all fine and good, but […]
With rising costs and an increasingly tough regulatory market more advisers are looking to outsource their investment proposition, with many leaning towards discretionary fund managers. But while the number of advisers using DFMs is on the up, overall satisfaction with them has dipped. According to a recent survey by financial information firm Defaqto, 74 per […]