How do you know if you’ve been mis-sold an Investment?

Investing is not without its risks and even the most seasoned investors lose money. 

It can be quite tricky to know whether the money you’ve lost on your Stocks and Shares ISA or Investment Bond is just part and parcel of the deal, or whether you are owed money as a result of poor financial advice. 

Without any experience in the matter, it can be a minefield of confusing terminology which leaves you with more questions than answers. 

Losing money as a result of poor financial advice from your bank can leave you feeling helpless. CLAIMS DIRECT is here to help you and determine whether or not you are owed compensation. 

What are mis-sold investments? 

mis-sold investment refers to the ‘negligent, deliberate or reckless sale of an investment, where the investment was misrepresented or unsuitable for your needs.’ 

Whether that was through a smooth talking salesperson pressuring you into making the investment, or the risks were not properly explained to you, then you may have been a victim. 

The type of products typically mis-sold includes Stocks and Shares ISAs, Investment Bonds and Unit Trusts offered by most high street banks. 

However, it’s important to remember that just because an investment you made didn’t go quite to plan, it doesn’t necessarily mean you have been mis-sold. 

We have compiled a list of questions to let you know if you are owed compensation. If your answer is ‘no’ to any of the below then you may be owed money because you received bad financial advice: 

  • Did your adviser properly explain the risks involved? 
  • Were you made fully aware that you might lose money overall at the end of the agreed investment period? 
  • Were you made aware of how much money you stood to lose over the investment? 
  • Did the adviser clearly explain to you how the investment product worked? 
  • Were the terms of the investment fully explained – were you made aware of the financial penalties for taking out your money early? 
  • Were the annual management charge figures set out for you? 
  • Did your adviser take due care and consideration over what you hoped to achieve from your investment? 
  • Did your adviser ask what the returns were earmarked for – retirement, school fees, health care, and so on? 
  • Did your adviser ensure that you had a good level of investment understanding? 
  • Were you asked if you held other investments? 

Were the alternatives explained if the investment proved unprofitable? 

If you can answer ‘yes’ to the following then you may have actually been pressured into a sale, and you can make a claim for investment mis-selling: 

  • Did the adviser lead you to believe that good returns were practically guaranteed? 
  • Were you led to believe that your initial investment was completely safe, even if the returns didn’t materialise? 
  • Did you feel pressured to make the investment? 
  • Did your adviser seem intent on selling you one particular product? 
  • Were you encouraged to move funds from an existing investment into another with a promise of higher returns? 

£532m set aside by FSCS to levy unscrupulous firms 

FSCS will levy firms £532m this year, £16m more than it forecast in its Plan and Budget 2019/20 at the beginning of 2019. The main reasons for the relatively small increase (£16m) between the forecast levy and the final levy are an uplift in the number of claims against SIPP operators and an upward revision to the expected continuing costs in some historic insurances failures. 

The main driver of the compensation costs falling on FSCS in 2020 will continue to be pension claims. The bulk of these claims will continue to arise from bad advice to transfer retirement savings out of occupational schemes and into SIPPs – usually with a view to investment in risky and illiquid assets. 

Mark Neale, outgoing FSCS CEO, said: “These trends underline the importance of the greater weight which FSCS intends to give in its strategy for the 2020s to both promoting awareness of FSCS protection and to preventing the mis-selling and advice failures which underlie these costs. We shall need the support of our partners in the industry and in the FCA in both respects.” 

Mr Neale continued: “Promotion and Prevention are the counterparts of our continuing and undiminished commitment to be prepared for failures when they occur and to provide an excellent service to consumers who need our protection as a result of failure.” 

I think I’ve been mis-sold – what is the next step? 

If you believe you have been a victim of a mis-sold investment then contact CLAIMS DIRECT to see if you can claim compensation. You will be assigned your own dedicated claims expert to go through hassle-free process and you could be receiving thousands of pounds in compensation within weeks!! 

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