Feb. 19, 2019 4:32 AM ET
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A professional negligence solicitor will call on the services of independent actuaries, barristers, financial advisers and insurance experts who work together as a specialist team when necessary to settle compensation claims for mis-sold investment bonds. On a no win no fee basis, if the claim is unsuccessful for any reason, a professional negligence solicitor will make no charge whatsoever. You should not be asked to fund or finance your application in any respect. Clients never usually pay any charges unless the claim is settled successfully.

Independent financial advisors, consultants or agents effectively hold themselves out as experts in the same way as professionally qualified people such as lawyers and doctors and they can therefore be held to account and sued in a court of law by a professional negligence solicitor by failing to offer sound financial advice. The ordinary rules of negligence apply and in order to succeed in a compensation claim against an independent financial advisor, consultant or agent it is necessary to prove the following:-

Duty of Care - It must be shown that the independent financial advisor, consultant or agent owes the client a duty of care which is usually established by proving the existence of an advisor/client relationship which may be evidenced contractually in writing by way of a business agreement or acceptance of agreed terms and conditions or merely verbal by the advisor agreeing to work for the client.

Breach of the Duty of Care - The advisor must apply reasonable skill and care in the advice that they give to the client and failure to do so may amount to negligence if no other similarly qualified advisor would have given the same advice. The advisor does not have to be exceptional but must be reasonably competent and diligent when compared to others in the same field. The advisor should make detailed enquiries about the client and their attitude to risk before advising any particular investment as failure to do so may amount to negligence. The mere fact that an investment losses value is not necessarily indicative of negligence.

Causation - Obvious as it may sound it is necessary for a professional negligence solicitor to show that the negligent advice was heeded by the client and followed by the client thereby causing direct financial loss. If the client would have taken a similar direction with or without the advice, then it may not be possible to show causation. Losses that are totally unpredictable may be deemed to be too ‘remote’ to claim.


Mis-selling of investment bonds has been going on for decades however this issue has recently been brought to the fore as a result of stock market values falling all over the world. These investments often known as a ‘guaranteed income bond’ or as a ‘with profits bond’ or as a ‘precipice bond’ (because their value sometimes falls off a cliff!) often pay out higher rates of income than would be expected, the downside being that the capital value of the investment may fluctuate and investors often receive decent enough income only to be faced with the fact that their capital value has plummeted meaning that it is a far from secure method of investment. It all depends on where you buy your investment bonds and which one you chose which is usually down to the financial advisor in whom you have inevitably put your trust.

Independent Financial Advisors & Banks & Building Societies

Many investment bonds were sold by banks and building societies, promising savers a higher income than they could get from deposit accounts however it has now been proven that that advice on these bonds was unsuitable or unclear for almost seven out of ten savers. The old saying that if it looks too good to be true, it probably is, holds fast with many types of investment bond however, naïve investors are often bamboozled by underhand financial advisors who sell the high interest aspect of the investment but conveniently forget to mention the potential loss of capital value for the one and only purpose of earning themselves a healthy commission at the expense of the investor. This is mis-selling in its worst form however there are other issues with investment bonds and inadequate communication between the advisor and investor can give rise to a mis-selling compensation claim.

Failure of Communication or Negligence or Dishonesty

Most compensation claims for financial loss as a result of allegations of the mis-selling of financial products arise as a result of a failure to explain the terms of the product to investors; and/or misleading statements made to investors. Whether or not the financial advisor made a negligent error or was deliberately economical with the truth matters not as a failure to communicate the true situation with a guaranteed income bond or a with profits bond or a precipice bond means that any investment by the investor was as a result of mis-selling by the financial advisor entitling the investor to receive damages. There are very many ways in which investment bonds can be mis-sold however the most common failure by investment advisors is a failure to inform that the money is invested in the stock market which can be extremely volatile often coupled with a failure to do a full fact pertinent to the investor and in particular failure to ascertain the investors attitude to risk bearing in mind their age and perhaps impending retirement. Failure by the seller to fully disclose all risks can give the investor grounds to claim mis-sold investment bond compensation.

Mis-Selling Grounds

A large proportion of financial investments are in fact mis-sold giving the buyer the right to repudiate the contract with the seller and reclaim compensation from the financial advisor. There are numerous ways in which a financial investment can be mis-sold including: -

  • failure to carry out a full fact find
  • failure to establish the buyer’s attitude to risk
  • failure to advice that investments go down as well as up
  • failure to correlate the stock market with risk with the investment
  • failure to outline all charges and penalties where appropriate
  • guarantees of income that are not achieved
  • guarantees of capital increases that failed
  • guarantees that capital value is safe when it is not
  • misleading statements both verbal and written
  • failure to consider the effect of retirement
  • failure to consider the effect of unemployment
  • inability to access money when initially advised otherwise
  • long term investment when short term required
  • high risk investment when not appropriate to lifestyle
  • offered only one product when more available
  • failure to communicate full details of the product
  • cancelling old mortgage/policy for new mortgage/policy – aka unlawful ‘churning’

Professional Negligence Solicitors

A professional negligence solicitor will provide a compensation claim service dealing with mis-sold financial investments including whole life plans, pensions, life assurance, savings plans, PEP’s, ISA’s, life policies for inheritance tax, pension mortgages, income protection plans, lump sum investments, endowment mortgages, straight repayment mortgages, PPI, investment bonds and all other financial products. Most professional negligence solicitors operate a risk free no win no fee service and do not ask you to fund or finance the claim as it proceeds. If the financial investment compensation claim is lost no charge will be made to you. Legal charges only apply for work carried out on your behalf if the claim is successful. A professional negligence solicitor will challenge investments on the basis that they were either mis-sold or they do not comply with statutory requirements, and in many cases, they are able to obtain a full refund notwithstanding that the value of the investment may have fallen over time. Every case is considered individually, and many clients do not realise the extent of their problem nor the amount that they can claim until a full assessment is carried out on their behalf.

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