Monday, July 19, 2010

80-year-old sold highly leveraged property fund

My mother, the IFA and the property fund he sold her

Not many financial advisers would recommend that an 80-year-old widow should invest a significant amount of her portfolio in a highly leveraged property fund that only traded once a quarter. Its not brain science - what qualifications do you need to be an IFA?!

Posted by smithers @ 04:17 PM (1648 views)
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10 thoughts on “80-year-old sold highly leveraged property fund

  • extrapolation of a previous existing trend i am afraid!

    I always remember being offered units in the Nikkei Dow – just before it crashed, and i asked why and the salesmen said well they have been going up and up and up……. thanks but no thanks said i!

    At the very least they should have given her some diversification. Shocking really.

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  • montesquieu says:

    Shame for the old lady but reading the comments … some complete numpties though in the comments, how they got money to invest in the first place is a complete mystery. Almost crying out for someone to take it off them. ‘I insist on low risk, widow and orphans stuff.’ ‘How about high yield commercial property?’ ‘Oh all right then’. Whoops, lost £400k. Priceless.

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  • happy mondays says:

    Here’s how to invest….

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  • The money for nothing service industry.

    We now sell BS instead of BSAs. People are still wondering why. D’oh!

    Recaptcha – fall heartier

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  • HM – thats happened to me more times than i care to remember! 🙂

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  • financial planner says:

    This is entirely typical of financial product salespeople. They know lots about tax and products and NOTHING about money

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  • Present company excluded JD?

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  • what qualifications do you need to be an IFA?!

    A cheap suit, a wide smile and a sympatheitc regulator.

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  • actually paul you are not quite right. Recently they have tried to smarten up the act [and i dont mean more expensive suits]. I mean look at Endowment mis-selling and MVRs and the attitude of the FOS. Not to mention PPIs. Perhaps the regulators were behind the curve but they have done some catching up. In addition the fact is that PI premiums have increased to reflect these errors. Maybe Jack C could expand on this.

    I think the point is what i made earlier, and as FP alludes to. They are salespeople who dont know enough about the products they are selling and not enough about the markets. To do that you need lots of experience to call market turns and to tell people to (for example) get out of property / shares and go into cash. Not only that but even then you can be wrong by months or even years – as no doubt many on here will attest.

    This is why there is the “past performance is not necessarily a guide…..” etc.

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  • it_is_going_with_a_bang says:

    The problem – especially more so at the moment – is that interest rates are not performing well for people.
    That leads people to become more desperate.

    Add to that whenever someone with money goes into a bank the cashier takes one look at that persons assets and attempts to push them into a room with a financial advisor. That in turn may also push them to find alternative financial advice as a comparison.
    Then you get a 60/70/80 year old person facing the full force of a sales pitch and being told that there is “better elsewhere” and “your money isn’t doing anything for you” – to list a few of the lines used.

    Vunerable (as well as so called competent!) people are targeted everyday with this sort of behaviour.
    I will use my mother as an example. In the end took out a 350k investment with Barclays in shares. She only went in to pay in a cheque.
    Once the sales pitch was in there was not much I could do and believe me I made my point of view clear.

    Now I cannot say it has been a bad decision as I have not seen the fund recently. But it just goes to show how easy it is for people to be talked into parting with huge sums of money. The fine print disclaimers mean nothing to those like my mother. She has no idea what she signed other than it was virtually a promise to get a “better return on your investment” – and a wedge of cash in the financial advisor’s pocket.

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