What do you do when you realise that something’s gone wrong with the financial advice you’ve received? When you realise that your trusted financial adviser isn’t so trustworthy after all…
Imagine realising that, despite telling your financial adviser you didn’t want to take too much risk, they’d placed your life savings in medium or high-risk funds. Or that they’d failed to follow basic investment principles, such as diversification, and put everything into one type of asset, so that years later it’s worth far less than you anticipated.
What we’re finding here at the Which? Money Helpline is that all too often, we’re dealing with the fallout from the uglier side of the financial advice industry.
Rogue financial advisers
We helped one Which? member get his money back after receiving some dodgy advice from his financial adviser to invest his pension in an unregulated scheme.
It turned out that there’d been no discussion of his attitude to risk, no letter outlining why the investment was suitable and all the money had been put into one investment, so there was no diversification.
We’ve also finding cases where people are being sold investments that are completely unsuitable for them.
In March, we spoke to a member who was advised to invest all of their money into self-storage pods. Two years on and the income had dried up. But they’re unable to get their money out because there are no buyers for the pods, despite being told this wouldn’t be a problem when they signed up.
This unregulated investment was completely inappropriate for their cautious attitude to risk.
Implications of poor advice
The problem is that it’s not just the financial loss which leaves its mark – there are emotional and sometimes even physical tolls taken by the realisation that you’ve fallen foul of poor advice.
Although poor performance alone isn’t usually strong grounds for a complaint, if you think you’ve fallen victim to a rogue adviser, don’t take it lying down. We’ve had notable successes helping members seek redress when they’ve been mis-sold an investment. And in some cases, we’ve seen members receive tens of thousands of pounds worth of compensation.
So have you fallen foul of poor financial advice before? What did you do about it?
This column first appeared in the May issue of Which? Money magazine.
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