Are You Eligible for Bond Compensation?

This article discusses what a mis sold bond is and how people might be entitled to bond compensation if they have lost out as a result. The key to deciding whether you have been mis-sold to lies in the Financial Services and Markets Act. This dictates how financial advisors and their companies must behave, and what they are and aren’t allowed to do.

If you have lost money through mis sold investment bond, then you may be eligible for bond compensation.  While it is expected that investors should be aware that financial markets can move in unpredictable ways, it is also acknowledged that financial advisors should have given you all the information that you needed to make your decision regarding how to invest.  In recent years, a number of high profile cases have come to light which show that some investors have not acted in the best interests of their clients, either through deliberately misleading them for their own benefit or just because of sheer incompetence.

The recent revelation that a large number of elderly investors were sold wholly unsuitable investment bonds resulted in a record fine being levied on HSBC, and they are far from the only company to have been found guilty of mis-selling investment bonds.  If you have purchased any bonds that haven’t performed or lived up to the promises of the financial advisor, it may be worth taking a little time to check whether you can claim bond compensation.

The key to deciding whether you have been mis-sold to lies in the Financial Services and Markets Act.  This dictates how financial advisors and their companies must behave, and what they are and aren’t allowed to do.  Central to the instructions are those which state that they must consider the needs and requirements of their customers properly, communicate all relevant information clearly without misleading or hiding anything, and conduct business with care and diligence.  Any advisor that fails to meet these requirements is liable to provide bond compensation in full for any losses suffered, and may also be fined by the Financial Services Authority.

To understand what is meant by the above directions, we need to think about what a typical investment bond application should involve.  It will start with the financial advisor asking some questions about different aspects of your lifestyle and your financial circumstances.  They’ll ask what you intend to get out of the investment, such as whether you want it to grow or produce an income,  and what your attitude to risk is – if you’re a cautious person then they should recommend safer investments, for example.  The answers to these questions are then used to narrow down the range of available bonds before they make a recommendation to you.  On making a recommendation, they should walk you through the details and confirm that it meets your criteria.  They should be able to justify it based on what you’ve told them, so if you have said that you might need access to the money in the next few years they shouldn’t recommend a bond which locks you in for a fixed term. 

If the financial advisor has not taken into account your wishes, then you may well be eligible for bond compensation.  Your next step is to request a review of your investments by a suitably qualified individual, and they will be able to tell you whether you have a case and how to start your compensation claim.

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