Other Citywire websites
Stay connected:

View the article online at http://citywire.co.uk/new-model-adviser/article/a652187

Barclays fails to pay out over Aviva fund sales

by Daniel Grote on Jan 21, 2013 at 08:00

Barclays fails to pay out over Aviva fund sales

Barclays has failed to pay out to a number of investors in Aviva’s Global Balanced Income and Cautious Income funds, over which it had agreed to provide up to £60 million in compensation, according to the Mail on Sunday.

The bank was fined £7.7 million by the Financial Services Authority (FSA) over mis-selling of the funds in 2011, with the regulator estimating at the time that the bank could pay up to £60 million in compensation to victims.

But according to Paul Cooper of Claims UK, who is co-ordinating claims among investors, a number of investors have been told they will receive no, or very little, compensation.

He told the Mail: ‘In more than 250 cases we’ve handled, many investors have received no compensation or very low offers along with statements to the effect the FSA has endorsed Barclays’ action. When we have pursued the complaint, the Ombudsman has inevitably required the bank to pay more.’

The paper cited the case of Margaret Shibon, a widow in her 80s who was told to invest £250,000 in mid-2007, and went on to lose £60,000. She received a letter from Barclays in May 2011 following a review of the advice she was provided. In it the bank admitted ‘you did not receive the most appropriate advice’, but said calculations ‘agreed with the FSA’ showed ‘you have not suffered a financial loss as a consequence of the advice. She later won £63,000 after taking the case to the Financial Ombudsman Service.

The FSA told the Mail: ‘When we require a firm to put a redress scheme in place, the intention is to restore the customer to the position they would have been in had they received suitable advice. Since the methodologies used are usually set out in letters to customers, there’s nothing confidential about them. It’s right people should be able to complain to the Ombudsman if they feel that the redress doesn’t reflect their losses.’

4 comments so far. Why not have your say?

Hickky

Jan 21, 2013 at 09:21

Yet another claims management firm trying to cash in. All investments can show a loss at some stage, it is right that the FOS remember this when assessing compensation. If the investment was described as low risk and it proved to be medium risk, place the client into tha position they would have been in if they invested low risk. Why place them into a position they would have been in at no risk?

Remember, these are Aviva funds, and with a 5 year investment window, invested in 2007, timing is the most important thing, 2007 was not a good year. Barclays were fined because they did not assess the risk properly.

report this

Julian Stevens

Jan 21, 2013 at 10:07

Perhaps this will be one of the first issues that Hector Sants' tackles upon taking up his new post as head of compliance at Barclays. Whilst it may not make him popular with his new bosses, it will at least demonstrate the sincerity of his intentions to clean up the Barclays house. If he doesn't........

report this

CirrusPilot

Jan 21, 2013 at 14:08

Julian, Don't bank ( sic) on it, he will spend most of his time travelling to the States to ingraciate himself with the powers that be,. 2 years time he will move to the good old USofA with a big salary hike and big brown nose.

No retail customer of Barclays will see any benefit of his employment

report this

Hickky

Jan 21, 2013 at 14:21

@ Cirrus

Hector has brown nosed from job to job for years. Just look at his employment history, he, just like the chairman of the FSA, has pritty well failed every appointment, but has ensured that the excrement does not stick. The Teflon Knight must have a super technique at interview though!

Its just the brown does not stick to his nose.

report this

leave a comment

Please sign in here or register here to comment. It is free to register and only takes a minute or two.

News sponsored by:

Opportunities emerge as production moves back home


As the UK coalition government strives to rebalance the national economy, so called 'reshoring' looks set to play an increasingly important role in economic recovery.

Today's top headlines

A spotlight on Alastair Mundy


Alastair Mundy met Citywire's Daniel Grote at the London Stock Exchange Studios for a detailed interview about the Investec Cautious Managed fund.

More about this article:

More from us

What others are saying

Archive


Read more...

FOS appoints new chief executive

by Michelle Abrego on Jul 23, 2014 at 15:04

Sorry, this link is not
quite ready yet