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Mis-Sold Investment Claims: A Guide

If you have been sold investment products that performed poorly and experienced financial losses as a result, compensation claims could be filed either with the Financial Services Compensation Scheme (FSCS) or civil court proceedings to recover what has been lost.

Mis-Sold Investment Claims: A Guide

If you are considering filing a mis-selling claim, it is essential that you understand its legal principles. In this article, we will look at a few preliminary points.

Identifying the Mistake

No matter if you are investing your savings, transferring your pension, or buying a mortgage, it is essential that the products and services are tailored specifically to your situation. Otherwise, they could have been mis-sold, leading to possible scams such as mis-selling.

Mis-selling occurs when brokers, financial advisors, bank representatives, or salespeople sell a financial product or service that does not adhere to the standards set forth by the Financial Conduct Authority (FCA). You can learn more by clicking the link.

Mis-selling occurs often in the sale of investment bonds. These life insurance policies allow your money to be invested across several funds, typically sold by advisers who must meet sales targets to retain their jobs and bonuses - leading to many high street banks being fined for mis-selling these products to people who were not suitable.

Mis-Sold Investment Claims: A Guide


Investment can be risky, so you need to trust that the advisor you work with has your best interests at heart. Unfortunately, in recent years, the UK has witnessed an upsurge of advisors mis-selling investments to their clients while failing to clearly explain the risks involved.

According to FINRA rules, stockbrokers are required to obtain as much knowledge about their customers before offering advice. This includes considering factors like age, occupation, income tax status, other investments owned, family needs and their investment goals & time horizon, and risk tolerance levels.

Contractual Obligations

Always bear in mind that investments contain some risk, and you alone are accountable for any decisions based on the information provided. Therefore, it is imperative that risks are explained in an understandable manner.

Bank staff, financial advisors, and other regulated salespeople often sell investments based on commission opportunities rather than what the customer requires - leading to conflicts of interest and failing to consider what would best serve the customers when making recommendations for investments.

Time Limits

Many individuals turn to financial advisors when considering investing. Unfortunately, some individuals or institutions may have put profits before customer interests when offering inappropriate investments for sale; when this happens, victims can often pursue legal recourse through either the Financial Ombudsman Service (FOS) complaint process or civil court litigation to seek compensation.

No matter what financial products or services you use, be it investing your savings, transferring a pension plan, or borrowing money - everyone deserves fair and responsible advice.

Investment claims can be difficult to navigate due to various time limits that can be complex to understand, yet recent case law offers guidance for those looking to bring an investment mis-selling claim against their bank or investment firm.

The Financial Ombudsman Service or FOS has set rules regarding these claims from banks that determine how long you have to file complaints about any mis-selling. This time limit for compensation is known as the '6-year rule'. This is important to keep in mind.

FOS does not dismiss complaints outright that are outside the time limits, though banks may still refuse compensation payments if they believe there are exceptional circumstances that justify doing so. Therefore, it is crucial that legal advice is sought as soon as you suspect there may be cause for complaint to avoid this happening.

Due to a surge in mis-sold SIPP investments entering the court system in recent years, an extensive body of case law has emerged in this area - providing clarity as to how courts will treat similar claims going forward and what both claimants and defendants can expect from one another.

For your court claim to succeed, it must be filed within six years from when you received negligent pension advice (or three years from when it became clear to you), and have written directly to both the advisor or Principal who provided it as well as FOS with regards to their final response before seeking review by them or FOS.