Cru fund suspensions force retired couple to search for work

Apparently these investments were held via a Canada Life bond: can anyone explain why a bond wrapper would be suitable?

3 funds for £100,000?

Insufficient diversity to my mind, let alone the fact that the funds were so opaque that we never recommended them. Don't know why the bond wrapper was suitable or not but we may have our suspicions......

We're Norwich based too, though not MiFID so couldn't have done the EU investment, but what a different outcome these porr people would have had.

and why did the adviser put so much of their money in these funds. what about diversification and risk assessment?

1 - Read Fidelity's paper on Bonds v OEICs etc. Basically without knowing the client, one can't say.

2. Paul and have stated/asked the same question I would.

The adviser has a lot to answer for here.

1 - Just three funds used

2 - sounds like a random hit and hope approach on selection

3 - used funds that most advisers avoided due to lack of information (and thats not hindsight). Poor research

MiFID wouldnt apply if they came back to the UK to sign the forms. A bit daft really. Get on a plane, come to your office and sign the forms and its acceptable. However, post them back and its not.

I hope they put a complaint in against the adviser in question. I dont like saying that but its that sort of poor recommendation that reflects on all of us.

You must consider taking action against the IFA for not giving balanced advice. Being Cardiff based as were Cru Investments I do feel sorry for the clients --- we are not all like that in this part of the UK and did not have one client in those investments. Hope no-one asks me to guess the adviser !!!!!!!!!!!!!!!!

Insight

Obviously 3 funds for a £100k investment shows at best a very simplistic sense of investment planning.

HOWEVER, it must feel nice to have never made a mistake in ones financial services career before

I would have liked to have taken advice from all previous contributors to this blog over the last 40 years just to congirm that they had never made a mistake (knowingly or otherwise)

To err is human, to forgive devine ?

There's probably a lot more of this sort thing around than most people realise. I too am a victim having been advised to invest 100k in the Matrix fund that's now suspeded. 2I specifically asked for a low risk, low volatility fund and this was sold to me as such.

The FSA should sue these people (the funds and/or the IFAs) and force them compensate people who lose out having bought a so-called "low risk" investment that turns out to be anything but. Scandalous!

I sympathise with Mr and Mrs Harris (and Mr Leake) but I'm left wondering who actually paid for the advice that they received.

Was it the product providers by any chance?

Fee paying clients free their adviser from the conflict of having to sell them a product to get paid. They're also more likely to benefit from a healthy cynicism towards the dubious claims of product manufacturers.

It's probable that Mr and Mrs Harris would have been better advised to buy a temporary annuity or possibly to do nothing at all. A fee of £2,000 for this advice would have been a bargain.

When I come to power, the FSA will divert all of their resources away from box ticking towards educating the public that advice is always worth paying for.

It's a tragedy that these people had to learn this fact of life hard way.

Whilst I would accept that the Cru funds were 'weird and wonderful' to say the least, the problem is that regardless of whether or not you do your research at the outset , things can go wrong with a fund after you have invested.

Remember Rory Powe, Peter Young to name two investment managers.

If you do not have a contract with your clients for monitoring the investments and regular reviews, then who is to blame when it blows up 2/3 years down the road having done the research at the outset.

As many have said hindsight is a wonderful thing. Endowments, splits, structured products, UK Provident, Equitable Life etc etc etc we have a long list of companies in our industry that have failed to deliver. The problem is where does the buck stop, with the client with the advisor or with the company!

It is impossible to regulate performance, however, I personally think that it is about time the investment industry looked very critically at itself particularly in the light of the last twelve months when many so called safe/low risk funds have totally missed their objective yet the fund managers are still being overly paid.

Remember that the FSA will not sit in judgement on investment returns if a company has been operating within its mandate.