My aunt was sold a risky investment - at the age of ninety-four

My aunt was sold a risky investment - at the age of ninety-four

When she was 94, my aunt was sold a five-year Canada Life investment product with a £3,400 early-redemption penalty. I complained to the financial adviser who sold the policy, Sherwood Corporate Solutions. It passed my letter to Interdependence, which is the network of IFAs that it belongs to. Interdependence said Sherwood had done nothing wrong.

The investment has subsequently lost value, but that is not my main concern. It is that my elderly aunt was sold an investment linked to the stock market and property values that really amazed me. GC, Liverpool

Margaret: It amazes me too. Financial companies must take extra care when dealing with elderly people and I'm glad to hear that a friend accompanied your aunt. But I find it difficult to think of any reason why such an elderly person should lock away her money in a life insurance-based investment with set-up charges and annual fees, and with the risk of losing money.

Contrary to your aunt's belief, this is not a five-year investment. It is in fact longer but, after five years, there are no early redemption penalties.

Your aunt had told the salesman that she accepted she would eat into her capital to get a higher income. But was she told she was putting her capital at separate risk by investing in the stock market? Of the £65,000 she invested, 80 per cent went into UK property. Both Interdependence and Canada Life regarded this as a low-risk.....continued below

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fund. But in the past two years it has fallen 4.8 per cent, demonstrating that even low risk still involves some risk. And what is low risk to a 34-year-old insurance salesman is different from low risk for a 94-year-old.

You are not entitled to complain about performance, but you can complain that the fund was inappropriate for her. Interdependence assured me that someone had taken a fresh look at the sales process but it came to exactly the same conclusions.

As you have power of attorney for your aunt, I suggest you take her case to the Financial Ombudsman Service. Phone 0845 080 1800 or 020 7964 0500, or visit financial-ombudsman.org.uk.

Our student daughter signed off for £700

For the past 18 months, we have tried several strategies to help our student daughter keep control of her money. Last August her father organised a joint NatWest account which required both their signatures before she could make withdrawals.

The bank failed to set it up properly and she withdrew substantial amounts with her signature alone before we realised. We set it up again. Then recently we discovered that a different branch of her bank had again allowed her to withdraw £700 in one month. She has no further student grant payment until September. Our incomes are limited so we cannot help her financially.

The bank admitted making a mistake but refuses to compensate us as 'no actual loss has been incurred from the joint account'. WD, Market Drayton, Shropshire

Margaret: There can be no excuses for NatWest's failure to honour the both-to-sign mandates, even though your daughter sounded extremely plausible when she persuaded the branch staff that she had your verbal authority to get money. NatWest admits this was unacceptable and the staff have been told.