Mis Sold Stocks and Shares ISAs

A stocks and shares ISA explained

Individual Savings Accounts (ISAs) have been an incredibly popular investment choice ever since they were introduced in 1999 to replace the old PPI schemes. They act as a simple and tax-free way to invest your savings by avoiding the penalties that come with income and capital gains tax, allowing you to invest up to £20,000 in an ISA each tax year.

ISAs are generally offered by banks or building societies but investment firms can also offer their own products. Unfortunately, their popularity has led to an increasing trend of individuals winding up with mis-sold ISA investments because their financial advisor did not fully explain the difference between stocks and shares ISAs and the variety of other ISAs available.

When investing in an ISA, there are four main types that you need to be aware of:

• Cash ISAs
• Stocks and shares ISAs
• Innovative finance ISAs
• Lifetime ISAs

Out of these four, the most common types in use are cash ISAs and stocks and shares ISAs. A cash ISA is a simple, tax-free savings account that carries minimal risk and allows you to withdraw your money as and when you need it. A stocks and shares ISA on the other hand, allows you to take your savings and invest them in a wide range of shares, funds, investment trusts and bonds. Ideally, these will increase in value, thus increasing the value of your shares.

Stocks and shares ISAs can be extremely tax-efficient investments, but as with any investment, it carries a level of financial risk. Therefore, a stocks and shares ISA should not be invested in without an understanding of how investment works.

There are certain situations where a stocks and shares ISA may be suitable for your needs. These include:

• A willingness to invest your money in shares, funds, investment trusts, or bonds over a long period of time, usually 5 years minimum
• Not requiring immediate access to the invested money
• Being comfortable with making long term investments and the risks that come with it.

If you’re not comfortable with any of the above and your financial advisor encouraged you to invest in a stocks and shares ISA, then you may have been mis sold shares and could therefore be able to make a compensation claim.

How to tell if you’ve been mis-sold a stocks and shares ISA

When an advisor sold you a stocks and shares ISA, they should have discussed a certain number of things with you in order to help you understand the risks involved, and ultimately decide whether a stocks and shares ISA is the correct investment for you. This information should have included:

• How a stocks and shares ISA differs from a cash ISA
• The risks and complexities associated with a stocks and shares ISA
• What your current financial situation is
• Your attitude towards risk and investment, particularly how a significant loss of finance may affect you
• Your future plans for the investment
• Any other existing investments you may have

Your financial advisor should also never encourage the following:

• Using your pension to fund a stocks and shares ISA
• Borrowing money to fund a stocks and shares ISA
• Pressuring you in any way to agree to a stocks and shares ISA

If your financial advisor encouraged one or all of these things, then that is an immediate sign you may have been mis sold shares. Alternatively, If your financial advisor did not discuss one or all of the above requirements with you, then you may have a mis sold ISA, making you eligible for a mis sold ISA investments claim.

What to do if you think you have been mis sold a stocks and shares ISA

If you think you have a mis sold ISA, there is a variety of information and identification that will be necessary if you want to make a mis sold ISA investments claim. This should include any information you can provide from when you invested in the mis sold ISA, examples of which can include:

• Any or all paperwork from the associated investment and savings
• Evidence of when you were first contacted to discuss the investment opportunity
• Records of moving investments or savings
• Evidence of what the advisor recommended
• A record of those you spoke to while making the investment
• A record of how much you invested or moved

If you don’t have all of this information to hand, that’s not a problem. Having at least some evidence and records of the process is enough to begin the claims process.

How we can help?

Here at The Compensation Experts, we can help you with all manner of financial mis-selling claims, which includes any form of mis-sold investment bonds. If you think you may have been mis-sold investment bonds, you can contact us by filling in our contact form, or call us on  01618841451 to speak directly with one of our friendly, expert agents.