Warning – Old Mutual International (OMI)

Investors with OMI beware; declining customer service is often the pre-cursor to deeper, more fundamental organisational difficulties within an organisation. And organisational difficulties can result in losses for investors.

Several months ago OMI decided to sell shares in a Collective Investment bond without the authority of the bond holder. Unprofessional you may say and as I was that bond holder, I was inclined to agree. But everyone makes mistakes and I’m usually a forgiving kind of person so I was prepared to let it ride if they simply reversed the trade. Then I was told by a singularly unhelpful dealing administrator that they would not be able to reverse the transaction – so basically ‘tough’. After several months without any kind of apology, countless email exchanges, and an official complaint to the Isle of Man Financial Ombudsman, OMI did reverse the transaction, awarded £200 compensation and issued a formal apology.

A ‘one off’ incident? I had hoped so but fast forward a few months and they did the same thing again. Yet again they sold my shares without any authority and yet again delays of months and countless email exchanges ensued.

What did OMI have to say about this?

“I am disappointed with the level of service provided, and would like to work with you to make sure we conclude this matter to the satisfaction of Mr Lihou.”

“I can appreciate that this matter will have caused Mr Lihou further inconvenience and I would like to apologise for this.”

Having sold shares without my authority on two occasions, I took it upon myself to scrutinise the charges and transactions on my investment with them over the years. Not only had they failed to gain my authority on these trades, they had taken unauthorised charges on at least three occasions. To add insult to injury, they had charged me for their unauthorised trades!

None of this would have come to light if I hadn’t waded through their years of incomprehensible quarterly reports which are clearly designed for their own internal accounting purposes rather than the benefit of their customers (yes, ‘customers’ – ‘clients’ would infer a far more professional relationship).  They hadn’t found these errors, they hadn’t notified me, if I hadn’t discovered them they would have been left to stand and I would be out-of-pocket.

Needless to say I complained and whilst they acknowledged their errors there was no further apology (not that the one given above was convincing) and no hint of remorse over their repeated unprofessional action. They have promised to reimburse me for their over-charging and they offered £200 compensation – which I have declined because I think the Financial Ombudsman needs a record of how OMI are still behaving and you, the unsuspecting investment public, need to be aware of the risks of investing with OMI.

When a firm is repeatedly unable to respond to complaints within the statutory 8 weeks period, it tells you something about the number of complaints they are receiving!

Complain to the GFSC

I suggest that each and every continuing shareholder who is concerned about the risk of making a redemption request to EEA before their September deadline should contact the Guernsey Regulator and ask them to intervene on our behalf.

You can either telephone (anonymously if you wish) the whistleblower line: Whistleblowing line: +44 (0)1481 748094 as decsribed on the following link: http://www.gfsc.gg/The-Commission/Complaints-And-Standards/Pages/Whistleblowing-line.aspx or you can send them a message on the following link: http://www.gfsc.gg/The-Commission/Pages/ContactUs.aspx

I shall be doing so and informing them that last time redemption requests were allowed by EEA they devalued the fund after everyone made their requests. Insufficient notice was given to allow people to withdraw and consequently redemptions were made at a value not agreed by investors. We are entitled to be told what value any redemption will be and be assured that a repeat of the last fiasco will not occur after irrevocable redemption requests have been made.

Don’t be harassed into making a decision without the relevant information.

End of Redemption Lock Up Period – What to Do?

The last time continuing share holders were offered the chance to redeem 5% of their holding, EEA subsequently devalued the fund and promised we would have a chance to reconsider our redemption requests. I did reconsider but according to Old Mutual (Skandia), who held my shares:

“We received notification of whether we wanted to continue with the deals on 30th January and we have to reply by 2nd February so this did not permit us any timeframe in which to contact any clients regarding this. Just to give you an indication we have over 280 deals in place for this redemption period and we had to keep all deals in place as the next dealing would not be until 2016. With this many deals the default would have been to continue with the redemption and not to cancel all the deals.”

It’s also worth pointing out that 30th January was a Friday and that gave only the weekend (when they were all closed) before a reply could be made on Monday 2nd February. I have complained about this decision as it is not what I wanted and I was led to believe I would be contacted so that I could make my own choice. But Old Mutual, and everyone else, should not have agreed to the EEA timescale, they should have pushed back on the grounds it was totally unreasonable.

Here we are again; being asked to make a decision before September 25th on whether we wish to redeem any or all of our EEA investment without being told how much that redemption will be worth. Will it be based upon the original maturity value of the underlying policies as we have been assured they haven’t changed, will it be the discounted value that was supposedly only put in place to cater for early redemptions, or will it be subject to a further re-valuation (doubtless downwards) to be made at the last-minute before pay-outs?

I would urge you all to contact EEA and/or your intermediaries stating that it is unreasonable to ask anyone to make an irrevocable decision without knowing this fundamental information.

If you plan to attend the AGM, please also request that, unless a satisfactory answer is given beforehand, this matter is put on the agenda.

Class Action Passes £22m

The current value of claims in the Class Action against the FCA is now £22,848,750 and it continues to rise every day.

We are grateful to Skandia/Old Mutual for notifying their policy holders about the existence of the action and their letter should arrive in the post of investors by tomorrow. A number of postal claims and claims under a Power of Attorney are also anticipated before the deadline.

Prudent accounting practice dictates that the FCA should now accrue for potential losses, not only as a result of this legal action but if, as we expect, we win in the European court, a legal precedent will be established for many others to follow. In 2011, the FSA estimated the UK market to be worth around £1bn and the international market, damaged by their actions, will be many times that amount.

As a footnote, personal exemption from liability (under UK law) will also be forfeit when Strasbourg rules that Human Rights have been unlawfully restricted. I wonder who might be a tad concerned about that?

 

 

 

 

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