Dear Moral Money,
I’ve had the same financial adviser for 26 years and have built up a lot of trust over the years. Our wives are very good friends, we often have them over for dinner and our children are close to theirs.
He has been dependable in the past, bar a few hiccups here and there. That’s why I was so shocked when I found out he never put through an investment I asked him to make at the start of the year.
I have a fairly hands off approach to my investments and pensions most of the time, but I do get involved every so often and ask him to make investments. Last year I was doing a routine review and I asked him to make a £150,000 investment on my behalf.
He assured me he would, saying it was a good move, but I found out recently that he never did.
When I confronted him he said he “forgot”. That investment would have been worth £11,000 more now. It’s a terrible excuse and his carelessness has cost me. I’m so disappointed in his conduct and now I wonder if he treats me less seriously because we are friends.
I am in two minds. I am so angry and want to complain to his chief executive and seek compensation, but I know that he would likely be fired because he has already had a warning. If I do nothing then I have to resign myself to losing out on the money. Our families are so close, I worry that I would be blamed. Is it wrong to report it?
HF, via email
Blurring the line between professional and personal life always makes things complicated when issues arise.
From what you have said, it is clear that your adviser made a big mistake and failed to fulfil his professional responsibilities. He has admitted it to you, though it is not clear if he has confirmed it in writing or verbally. However you plan to proceed, make sure that you have it in writing and that you also have a hard copy of your initial request for the investment to be made.
This is a case of financial misconduct as a result of pure negligence, which sadly has cost you thousands of pounds. You certainly should not leave it unchallenged and are well within your rights to ask for compensation.
You could make a formal complaint to the company, detailing why you are now £11,000 worse off as a direct result of their employee’s actions.
If that fails, you can also report it to the Financial Ombudsman on the grounds that your adviser hasn’t followed transfer instructions and you have lost out on an investment opportunity.
You said this adviser is already on thin ice with his company, and this suggests he may have made similar mistakes with other clients. By reporting his behaviour, you could be protecting others in future from any similar costly events.
But the moral dilemma you are preoccupied with does not seem to be whether or not reporting him is the right thing to do. It is clear that a formal complaint should be made under normal circumstances. However, you seem far more concerned about the personal damage this could cause.
Set up a meeting with your adviser in a professional setting and question him about the mistake, making it clear how significant an error it is. You should be honest about considering a formal complaint and ask him how he wants to proceed.
He may offer to repay you himself to protect his position in the company. At the very least it will make him realise how big of a sum this is. He must take responsibility for his actions, particularly when you have entrusted him with such large amounts. You need to decide whether you can continue to depend on him as your financial adviser going forward.
If you haven’t already, you should tell your wife. It is more than likely that she will understand, it affects her too after all. As for staying friends, it doesn’t sound like you would happily have him sit across your dinner table and break bread knowing the man cost you £11,000 and did nothing to put it right.
It’s time to find a new adviser who will treat you with the professionalism you deserve.
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