Tony Hetherington is Financial Mail on Sunday’s ace investigator, fighting readers corners, revealing the truth that lies behind closed doors and winning victories for those who have been left out-of-pocket. Find out how to contact him below.
Mrs H.B. writes: In 2021, the annual review by our financial adviser Tier One Capital Wealth Management informed us that its advice charges were to increase from 0.50 per cent to 0.60 per cent.
In order to offset this increase, Tier One recommended switching from Prudential Growth & Cautious funds to Vanguard Lifestyle Equity as Vanguard’s fees were lower.
This has reduced the stability and predictability of our pension fund from which we draw an income, and we want Tier One to put things back to where they would have been if they had not recommended a switch.
Tony Hetherington replies: All investments linked to the stock market carry risks. There are no guarantees. And while the two funds you mention are not identical, they are not so dramatically different that the recommendation to make a switch stands out as completely unsuitable.
Fee rise: Jess Swindells from Newcastle-based adviser Tier One Capital Wealth Management
I did contact Newcastle-based Tier One, and managing director Jess Swindells gave me a statement from the company, saying: ‘At the time the advice was given to the client, fund diversification offered the most suitable and cost-effective recommendation, in line with the client’s aims, objectives and risk attitude.’
Fair enough. But what disturbs me is that the motivation for the switch appears to have been the increase in Tier One’s own fees.
The investment switch was presented to you as a way round this increase, rather than because one fund was better than the other.
The review by Tier One told you that its fees were to rise, and then added: ‘This is not a decision we have taken lightly and as maintaining and developing a high-quality advice service is our primary consideration, we have researched the marketplace on your behalf, to reduce where possible, the product and fund management costs associated with your portfolio, with a view to offsetting some of the above fees increase.’
In short, make this switch because our fees are going up and you can reduce the impact by investing in Vanguard and its lower charges.
However, this seems to go completely against rules laid down by the Financial Conduct Authority (FCA), which regulates Tier One.
The FCA rule book says an advice firm must not suggest that an ordinary client should switch from one investment product to another ‘if it knows, or ought to know, that the product’s charges… are presented in a way that offsets or may appear to offset any adviser charges’.
This appears to mean that investment recommendations should be made simply on their own merits, so I asked Jess Swindells whether she accepted that her firm’s review broke the rules. She refused to comment.
You have asked the Financial Ombudsman Service to look into this, and Tier One has told me it will cooperate.
The wording of Tier One’s review seems to me to go completely against FCA rules, and I can’t see any other interpretation, so it is a shame that Jess Swindells can offer none.
Why is our £16k Isa stuck in limbo?
Mrs J.H. writes: My husband and I transferred one Isa each to Nationwide, both holding over £16,000.
Nationwide opened my ISA but three months on my husband’s has not been opened. We found that Nationwide had returned his cash to the previous Isa provider, the Skipton Building Society.
No-one from either society contacted us until we made a complaint to Nationwide, whose staff said they were trying to recover the money from Skipton.
In limbo: Nationwide opened Mrs J.H.’s ISA but three months on her husband’s has not been opened
Tony Hetherington replies: I asked both societies to investigate. Skipton was quick off the mark, telling me it had sent your husband’s £16,099 to Nationwide, but it was returned the following day without explanation. Two days later, Skipton transferred it to Nationwide again.
Nationwide confirmed it did receive the funds after both transfers, but told me Skipton had not provided your husband’s details so the money had ended up in a Nationwide suspense account. Nationwide added: ‘While this was not Nationwide’s mistake we could have been more proactive in locating the funds.’
Your husband’s Isa has been opened, backdated to avoid loss of interest, and Nationwide has offered £350 by way of an apology.
£500 holiday payout delayed
Mrs L.T. writes: After my husband was taken ill on holiday in May, I submitted a claim to insurer Coverwise, whose policies are underwritten by Axa.
They asked for details, which I supplied four times, and a few weeks ago I managed to speak to Axa and was told around £500 would be in my bank account in the following few days.
Nothing has arrived.
Delay: Mrs L.T. submitted a claim to insurer Coverwise, whose policies are underwritten by Axa
Tony Hetherington replies: I contacted Axa Partners, which backed your policy, and staff there agreed that after they received the information they needed, there was a delay in dealing with it.
]The insurer has apologised, telling me: ‘We have reviewed Mrs T’s claim and we acknowledge on this occasion the service we provided did not meet the usual high standards we set at Axa Partners.’
Your claim has now been paid, plus an extra £125 as an apology.
If you believe you are the victim of financial wrongdoing, write to Tony Hetherington at Financial Mail, 9 Derry Street, London W8 5HY or email [email protected]. Because of the high volume of enquiries, personal replies cannot be given. Please send only copies of original documents, which we regret cannot be returned.
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This post first appeared on Dailymail.co.uk
