Some advice needed on a big loss

try not to panic. the term of investment is 5 years for a reason, to allow for down turns and upturns in cycles. in fact it prob should be more 7-10 yrs for commercial property returns to mature. trying to sell in a bear market is questionable. i imagine you may not be able to get your money out as it is a closed fund, to redeem your units they need would need to sell on your share of the investment - by 1) selling some of the property (unlikely) or 2) sell your share to another investor (unlikely if this fund is no longer being marketed). Property is a fairly illiguid asset class and going into the fund you should have be made aware of the pitfalls of falling values and exit strategy. If the properties are fully let to good tenants on long leases and producing good income that covers off the interest on the loan, and management fees then it remains a good investment and trying to exit at the moment - when the whole world is losing their head might not be sensible. the valuation is reflective of the price the properties would fetch today on the market. we all know that nobody is buying at the moment and the banks have shut down their lending. thus the market has tanked due to loss of confidence (which is exactly what you are suffering from!) but this may well not be the case in 5yrs time, the investment may well in time rise in value as the market recovers. Ring your broker and get a full update on the properties , lettings, leases, management fees etc... so you can assess whether the fund is still an ok asset.
 
If everything that this person has posted can be verified, I think she has been mis-sold.

  • Recommended fund(s) described to her as "medium risk" when even Eagle Star themselves accept that both of these funds are high risk.
  • Two concentrated equity funds (only 25 stocks in each fund) is not a suitable place for the investment, given that it's the entire of her worth, her first time investing and she's a novice. I'm assuming that the broker knew this - the fact-find should have established it.
  • It appears she didn't get a reasons why letter.
I agree that the funds themselves will probably recover and do well in time. These funds are generally good investments...if you are aware of and comfortable with their high-risk nature.

But that still doesn't take from the mis-selling issue that this person's posts infers. If all of the detail of the posts can be verified, she should contact the broker and then the Ombudsman.

Lambourghini make wonderful automobiles, but they're not suitable for learner drivers.
 
I rang the broker yesterday and my broker left the company 6 months ago. I am disgusted. I asked for a broker to call me back but have heard nothing as yet. They sent me details of a secure fund that I can transfer my remaining monies to. Apparently I could have made 4 changes per year into other funds. It details my current fund as 'high risk'! Can I ask them for a copy of the letter I should have received detailing why I was sold this policy? Is this letter standard practise? I really dont think I was given this letter, I am good at filing all my paperwork and would have kept this if I receiived it. The person on the phone said it was really up to me to manage the fund myself...
 
Are you joking ??? from 20 K to 11 K in such a short space of time ... , I would be looking to prosecute.

With all due respect Zoe would have to accept full responibility for investing in such a high risk fund, was it not explained to you that this was a geared fund or high risk fund? if not then you may have a case for complaint re miselling. In any case you would be unlikely to receive any compensation for your initial investment as you would of course have signed up to such a fund stating clearly that you knew the type of high risk fund that you invested in. Again you have given no backgraound to why you invested in this fund apart from your brokers advice, surely you at least thought over what you were investing in the risks associated with a fund of this nature?
 
I rang the broker yesterday and my broker left the company 6 months ago.

That's frustrating for you, I'm sure. But it's irrelevant if you have a legitimate complaint. Your complaint is against the firm and not the individual. All regulated firms must take responsibility for the actions of their employees, so if the firm is still trading, your complaint is still valid.


It's not just standard practice - it's the law. You must receive a "Reasons Why" letter detailing the reasons why the broker thinks that the recommended product is the most suitable for you from the range available to you.

I'd send the firm a letter requesting a copy of their Terms of Business letter, the fact-find they completed about you and a copy of the reasons why letter.

Apparently I could have made 4 changes per year into other funds...The person on the phone said it was really up to me to manage the fund myself...

These are red herrings and you should ignore them. The main issue is that, based on the information you have posted, you were sold a combination of funds at the outset that were unsuitable for your needs.
 
No need for a list, just know the products you sell and pros/cons involved, good brokers make money, bad brokers lose money.

BTW, I am not taking any shots at you.

No offence but this is ridiculous and childish thinking no help to anyone, i would assume you have lost funds recently though a managed fund of some sort from your posts as you are very keen for prosecuting and what not? you really need to put the full case together with more info before you can make snap judgements like this, you would have to prove it was bad advice in the first place, losing money does not always mean bad advice i have lost money through managed funds myself this year but i am not blaming my fund manager or bank this was my own desicion and i knew the risks.
Somtimes you have to hold your hands up and accept some responsibility for your decisions re investment. Of course there are cases where bad advice is the case and these should be followed up and taken further.
I am not a broker by the way and am in no way connected to brokerages this is just my opinion on them.