I wonder whether anyone out there knows of an elderly person who has been persuaded by a financial adviser to purchase a Bond, only to find out that it was a wholly inapproriate investment?
My mother wanted to invest the proceeds of her house in a high interest fixed term deposit account, but was persuaded by 2 Cooperative Insurance Salesmen to opt for a Norwich Union Bond. She was 85 at the time, and made it absolutely clear to the salesmen that she didn't want any risky investment, and that her money had to be absolutely safe as it was needed to pay for her care home. She also specified that she may need to get her hands on the money at short notice if there was a change of circumstances. I was present at the meeting, and she was given these assurances, including one that she would receive 101% of her investment back in the event of her death.
Sadly, my Mum passed away earlier this month, and when I notified Norwich Union of this, I was horrified to find that the value of her investment had dropped by nearly £12,000. It seems the guaranteed 101% return on death was 101% of the value on death, not the original investment. Norwich Union told me that they had been instructed by the Co-op salesmen to invest her money in a 5-10 year bond, purchasing cautious and balanced stocks & shares.
As far as I am concerned, it is completely inappropriate to have sold a 5-10 year bond to an 85 year old. Furthermore, I am very angry that the salesmen took advantage of her, knowing that she was not in the best of health, and that she completely trusted in the advice they gave. I find it hard to believe that they made such a risky investment, having been told specifically not to. I understand from Googling, that this type of practice by financial advisers is very common - because of the high commission they earn. Frankly, I think it's a disgrace, and I have lodged a formal complaint with the Co-op, and with Norwich Union. In the event they don't repay her investment, I have engaged a solicitor to present a case to the ombudsman and county court if necessary.
Has anyone else had a similar experience, or know of anyone that has? Please warn your elderly relatives that this is quite common, and if they have money to invest, to steer well clear unless they have a good chance of surviving at least 5-10 years. I do wish I had had a chance to read the paperwork before my Mum signed and returned it, but unfortunately I was out of the country. Whether the Co-op will agree this was a case of mis selling remains to be seen. My solicitor is convinced it is. I really don't think any reasonable person would expect an 85 year old to understand all the jargon contained in it - hell, I don't even understand it. I'd be interested to hear opinions on this, particularly if you know of anyone else similarly affected.