A claim for mis-selling can arise if you have lost money because of negligent advice from a stockbroker or IFA. There are many reasons why that advice could have been negligent - some are listed below:-
- Not completing a Fact Find - the stockbroker did not properly find out your true net-worth or you were wrongly categorized regarding the level of risk you were prepared to take.
- The shares were not suitable for an investor of your profile - you asked for low risk shares and you were inappropriately exposed to high-risk shares.
- You were pressurised to buy.
- You received bad or misleading advice - you were not told that the regulated advisor owned the shares and had a mark up.
- Suitable recommendations were not made when considering your overall financial position.
- The stockbroker failed to check whether, as a customer, you understood the risk.
If any of the above applies or you believe you have been treated unfairly by a regulated firm it is possible that you have been mis-sold and therefore you may have a claim. Please note even if the stockbroker or IFA has ceased trading you can still make a claim.
Complaints to a Regulated Firm
If you have lost money due to negligent advice received from a regulated firm, you must, in the first instance, make your complaint to the company that provided the advice. The Financial Conduct Authority has a laid out complaints procedure that all regulated firms must follow.
- On receipt of a complaint, the firm should provide a prompt written acknowledgement
- Within eight weeks of receipt of the complaint, the complainant should receive either a final response or a ‘holding response’ detailing why the company is not in a position to resolve the complaint. The firm will also indicate when they will make further contact.
- This contact must be within eight weeks of receipt of the complaint.
- Further contact within the stipulated eight weeks must be either the final response or a second holding response explaining reasons for the delay along with a reasonable time-frame for when the final response can be expected.
- The second holding response must enclose a copy of the explanatory leaflet about the Financial Ombudsman Service.
- After this period, if you are not satisfied with the firm’s decision, you may refer your complaint to the Financial Ombudsman Service.
Financial Ombudsman Service (FOS)
The FOS is the official independent organisation established in 2001 as a result of the Financial Services and Markets Act 2000 (FSMA) to settle individual complaints between consumers and businesses providing financial services.
- The FOS was set up by law to resolve individual complaints by consumers about financial services, quickly and with minimum formality.
- The FOS is a completely independent and impartial organisation that looks carefully at both sides of a complaint in order to evaluate the facts and suggest a fair outcome in accordance with the law, relevant rules and good industry practice.
- It is very rare for a regulated financial services firm to ignore a decision made by the FOS and in almost all cases, the firm will comply with the final decision.
- £150,000 – excluding any interest and costs. For complaints received before 1st January 2012 this limit is £100,000.
- The FOS is an accessible free service, where consumers can make complaints on their own behalf.
Financial Services Compensation Scheme (FSCS)
The FSCS is the UK's last resort compensation fund for customers of authorised financial services firms.
- If an authorised firm is unable or unlikely to pay claims against it, usually because it has stopped trading, the FSCS will declare the firm in ‘default’ and pay compensation to eligible complainants.
- To qualify for compensation you must be eligible under the rules outlined in the FCA Handbook.
- For claims against firms declared in default, the maximum amount of compensation that can be awarded by the FSCS against a firm in default on or after 1st January 2010 is £50,000 per person per firm. For firms in default before 1st January 2010 it is 100% of the first £30,000 and 90% of the next £20,000 up to £48,000 per person per firm
- The FSCS is a free service - from 28th August 1988, consumers can submit a claim on their own behalf.
If the regulatory redress channels prove unsuccessful but you believe negligence has caused you financial loss you may wish to discuss the merits of pursuing further action with our legal team. If there is a case, it is possible we may consider opening to a larger proportion of investors in the same position in order to pursue a class action.