Mis-selling of investment bonds has been going on for decades however this issue has recently been brought to the fore as a result of stock market values falling all over the world. These investments often known as a 'guaranteed income bond' or as a 'with profits bond' or as a 'precipice bond' (because their value sometimes falls off a cliff!) often pay out higher rates of income than would be expected, the downside being that the capital value of the investment may fluctuate and investors often receive decent enough income only to be faced with the fact that their capital value has plummeted meaning that it is a far from secure method of investment. It all depends on where you buy your investment bonds and which one you chose which is usually down to the financial advisor in whom you have inevitably put your trust.
Our mis-sold bond compensation claim solicitors offer no win no fee* advice on the mis-selling of financial products. Thousands of consumers purchased investment bonds totalling over £5 Billion and under the guise of Guaranteed Income Bonds, Precipice and With-Profits Bonds, many now face withdrawal penalties in excess of 50% of their original investment value.
FACT - 1,000,000+ consumers purchased these products
FACT - Only a fraction of them have made a claim
FACT - Unless you act quickly, your claim may be time-barred
These bonds were sold as an alternative to bank and building society deposit accounts by independent financial advisers, direct sales forces and bank salesmen. Not so well known however is the fact that single premium investment business is much more profitable to the banks and investment houses yet exposes the consumers (often pensioners) to an extremely high risk market.
A damning report, published by the Actuarial Profession's with-profit bond working party, was a point-by-point indictment of the practices that have since left so many savers' dreams in ruins. With advisers often pocketing in excess of 7% sales commission it is no wonder that these products have brought so much misery. The victims of this scandal should take specialist advice on mis-selling from a mis-sold bond compensation claim solicitor without delay.
Many consumers were told their money was tied up for only five years during which time they could expect an income in the form of annual bonuses. Although some consumers can withdraw up to 7.5% a year penalty-free as income, this income is produced only by eroding the capital investment value.
Since the report was published, with-profit funds have gone into meltdown as a result of stock market turmoil and in many cases bonus rates have been slashed to nil with many funds being closed to new business.
The report warned: 'There is a risk that purchasers may think that they are buying a very safe bond when in fact their encashment value is to a large extent in the hands of the company. This needs to be made very clear in the pre-sales literature, as does the company's policy in respect of the application of MVRs.'
Market Value Reduction Factors or MVR's, designed to cushion the effects of a drastic market fall can reduce as much as a quarter of the value of the consumer's funds if they try to escape the clutches of the bond companies.
Although you cannot complain about the poor market fund performance, you can complain If :-
The true nature of the underlying risk was not fully explained and documented; or
The adviser failed to explain the effect of the MVR on your investment
The majority of consumers neither understood the effect, nor the consequences of these outcomes because they believed the products were guaranteed to be free from any element of risk.
Many investment bonds were sold by banks and building societies, promising savers a higher income than they could get from deposit accounts however it has now been proven that that advice on these bonds was unsuitable or unclear for almost seven out of ten savers. The old saying that if it looks too good to be true, it probably is, holds fast with many types of investment bond however, naive investors are often bamboozled by underhand financial advisors who sell the high interest aspect of the investment but conveniently forget to mention the potential loss of capital value for the one and only purpose of earning themselves a healthy commission at the expense of the investor. This is mis-selling in its worst form however there are other issues with investment bonds and inadequate communication between the advisor and investor can give rise to a mis-selling compensation claim.
Most compensation claims for financial loss as a result of allegations of the mis-selling of financial products arise as a result of a failure to explain the terms of the product to investors; and/or misleading statements made to investors. Whether or not the financial advisor made a negligent error or was deliberately economical with the truth matters not as a failure to communicate the true situation with a guaranteed income bond or a with profits bond or a precipice bond means that any investment by the investor was as a result of mis-selling by the financial advisor entitling the investor to receive damages. There are very many ways in which investment bonds can be mis-sold however the most common failure by investment advisors is a failure to inform that the money is invested in the stock market which can be extremely volatile often coupled with a failure to do a full fact pertinent to the investor and in particular failure to ascertain the investors attitude to risk bearing in mind their age and perhaps impending retirement. Failure by the seller to fully disclose all risks can give the investor grounds to claim mis-sold investment bond compensation.
Our mis-sold bond compensation solicitors offer a no win no fee* claim service for mis-sold bonds. If you are one of these unfortunate people who were mis-sold, you may be entitled to compensation and you should contact us now. You only have one opportunity to make a claim. If you get it wrong you may lose your chance for compensation.
Why not get expert support to improve your chances of securing the maximum compensation you deserve using our no win no fee* service? We call upon experienced lawyers, accountants and actuaries to assist our claims team and can advise at an early stage on the prospects of recovery of compensation. If you would like free advice on our no win no fee* compensation scheme just call the helpline or email our offices and an experienced financial claims adviser will discuss your potential claim at no cost and with no further obligation.
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