Ensuring you have financial security in your retirement is essential, and it seems only natural that your bank would play a role when planning that security.
But according to a recent report, only 36% of people trust their banks. Although it’s hard to imagine your bank would ever knowingly sell you an inappropriate investment product, investment mis-selling is very real and many banks have been fined for it.
What is investment mis-selling?
Investment mis-selling is when you are sold an investment product under the following circumstances:
1. The risks weren’t explained to you.
2. You were sold a product that wasn’t suitable.
3. Your attitude to risk wasn’t assessed.
4. You weren’t offered a full range of options.
Investment mis-selling is shamefully under-reported, but it can have real negative consequences and particularly affects people approaching retirement.
If you’ve been mis-sold an investment product, the good news is you may be able to claim compensation.
William Thornley, for example, was mis-sold an investment by the Halifax.
Mr Thornley decided to invest an inheritance with the Halifax, making it clear to them that he wasn’t a risk-taker and didn’t want to lose money.
He was told his money would be safely invested in a stock market linked bond, but one year later, he was shocked to learn his investment had lost £4,000. His advisor reassured him that it would ‘come back up again’. Mr Thornley lost around £15,000 in total.
That’s when he got in touch with Goodwin Barrett, a mis-sold investment claims specialist. Their investigations showed serious flaws in the advice the Halifax had provided, including that Mr Thornley’s poor health hadn’t been considered. In short, he was sold an unsuitable product.
Goodwin Barrett were able to secure over £21,400 in compensation for Mr Thornley, leaving him “absolutely delighted”.
Protecting yourself from Investment mis-selling
Banks like Lloyds, Barclays, Santander and HSBC continue to pay record amounts in fines as a direct result of mis-selling investment products, but there are ways that you can protect yourself. For instance, asking your next advisor these questions may help you spot bad investment advice:
1) Am I being offered unbiased advice?
2) Has my attitude to risk been fully assessed?
3) Has the full range of product options been presented to me?
4) Are there any hidden charges?
5) Are you qualified to give appropriate advice?
6) What are the best and worst-case scenarios associated with this investment product?
7) What’s included in the service? For example, will my investment be managed for me?
8) Which investment products have a good reputation?
It’s important to only invest in a product that you feel comfortable with. If in doubt, seek financial advice elsewhere. And if you think you have been mis-sold an investment product, get in touch with a mis-sold investment specialist.
Goodwin Barrett, who helped Mr Thornley, can be contacted on 0808 301 4278. They can tell you over the phone if you’re eligible to claim compensation.