Mis Selling of PEPs Personal Equity Plan
PEPs were designed to allow investors to profit from investments similar to the stock market, without worrying about the same income tax or capital gains tax issues. In 1999 they were replaced with Individual Savings Accounts, and in 2008 any existing PEPs were converted over to ISAs. While customers could not add any more funds to their investment, the old PEP retained the same existing tax advantages.
PEPs had a certain amount of risk to them, but they also offered good returns, because the time that they were available was a period when the markets were performing quite well. A lot of people have held on to their original investment even now, and PEPs were quite popular with a wide range of investors, for many reasons. PEPs, however, were often mis-sold. They were not an option that was suitable for everyone.
Were You Mis-Sold a Personal Equity Plan?
These investment products were seen as being successful, and because of this they got a lot of word of mouth recommendations from happy customers. They would encourage their friends and family to take a PEP out. However, not everyone was a good candidate for a PEP, and because of the high-risk nature of the product, mis-selling was common. Advisers did not always explain the risks of them clearly. This means that some people would take out PEPs and lose a considerable amount of money, but not understand how or why that had happened.
Banks are required to follow regulations restricting them from recommending products that are not suitable for the needs of the client. They are also required, and financial advisers are too, to take into account the needs of people in terms of age, occupation, financial circumstances, and other issues, as well as their tax position, the length of time they are willing to hold the investment for, and their attitude to risk. Cautious people are not good candidates for the PEP, because they are a product that does carry a lot of risk with it.
Claiming for mis-sold PEPS
You should look to establish whether or not the risks and the investment were explained to you clearly. If you are looking to identify whether you were mis-sold a PEP, then think back to your initial chat with the adviser.
- Ask about your attitude to risk
- Discuss what an under-performing PEP might mean
- Take into account the level of experience you have with investing
- Discuss alternative products
- Explained the advantages and disadvantages of the product
If the adviser feels that you have fallen short on any of those points then they may be able to make a case for a claim for you. At Goldman Knightley, we are experts in reclaiming money for a mis-sold PEP, and we can help people to get rebates if the investment was not explained properly to them.