IFAApr 3 2020

Adviser saves client from £18k market fall

twitter-iconfacebook-iconlinkedin-iconmail-iconprint-icon
Search supported by
Adviser saves client from £18k market fall

An adviser has saved his client £18,000 after a provider blunder resulted in an Isa transfer occurring a month late — after markets had fallen 24 per cent.

Felix Milton, adviser at Philip J Milton & Company, had sent transfer forms to his local Natwest branch to transfer his client out of an Isa on February 25.

The local branch copied the form, sent the copies to head office and then destroyed the original, but Natwest’s head office refused to accept a copied version and asked for the original to be sent.

According to Mr Milton, if Natwest had enacted on the day the forms had been received the Isa would have been worth £74,000. 

But by the time the confusion was sorted, a month of market falls due to the coronavirus crisis had wiped more than £18,000 off the Isa's value, which sat at £55,700 on the day the Isa was eventually transferred (March 25).

Mr Milton complained to Natwest over the blunder, which then agreed to make up for the losses.

He said: “They did not try to contest it at all and agreed to pay the £18,000 compensation for the lost difference.

“Advisers should always complain if they think there has been a provider mistake which could have cost their client money.”

He said it was an “absolutely great feeling” to save his client the funds, adding it was a bonus the client now had the £74,000 to invest in stocks while markets were down.

Mr Milton also thought providers needed to “get with the times” and accept copies, or at least have a blanket rule for what they did and did not accept, adding: “It’s cost [Natwest] hugely in that regard.”

From February 25 to March 25 — the time it took to sort the mistake — the UK’s blue chip index and the S&P 500 dropped almost 24 per cent.

Mr Milton said the market falls were “pretty unprecedented”. He said: “We simply do not know how the modern markets will react. Think how far market trading has come, even since 2008.

“The market moves so quickly now. This could all go on for quite some time — it’s not going to be undone quickly.”

He urged investors to “sit tight for now”, claiming the economy would get back to normal, whether it was in “one year or 10”.

Natwest did not want to comment.

imogen.tew@ft.com

What do you think about the issues raised by this story? Email us on fa.letters@ft.com to let us know.