my parents took out a 5 year ISA with Canada Life 3.5 years ago.
Put in £3000 each.

this Isa was recommended by a Canada Life rep.
it went into american stocks and shares.

they got letters in post last week to say they are now worth
£1700 each with 1.5 years to go.

dosent look as if they are going to get there initial capital back
never mind any profit.

Any body got any advice on what to do about this. have they got any chance of legal action against Rep.?

What can they do or is it LOST MONEY?????????

(should ave put it into a motor and enjoyed it.)

Doesn't the line "Value of investments can go down and as well as up" cover this?

Nothing they can do about it - they should have been given options for safe capital ISA's, which have a lower return. Most people don't choose these as the projections look bad in comparison to one were the capital is not guaranteed, but the return can be much higher.

Thats what happens sorry. As the above answer, thinks can go Pete Tong as well as Carol Smillie. Read the small print is always good advice. In there will be a disclaimer to the effect of it can go down as well as up. There is an interesting slot on 909 every morning, they have some people investing in the markets, and one guy betting the most tipped horses in the newspapers. Guess who's made the most money this year, yep the guy betting the nags.

heres what should have happened:

adviser should have told clients about the perils of equity based investment- he should have explained the high market point and the possibility of a drop in the value. if they were fussed about losing any of the fund they should have not done it, if they were fussed about an overseas funds adding currency fluctuation to the pot they shouldnt have done it, if they didnt NEED growth on thier money and were happy to see it just keep pace with inflation they shouldnt have done it, if it didnt fit with their other investments......etc, etc

what probably happened:

the adviser is faffing about with 3K investments so lets assume he's not been in the job more than 4-5 years...he's NEVER seen a bear market, as far as he's concerned funds only go up..and before you all get excited i was there at the time- in 1998,99,00 there were many, many people who had not seen markets drop and truely belived that the US/European funds (which were prob sitting on 20-30% pa growth) where here to stay. When they spoke to clients they may not focus on the possible downsides- they didnt belive there where any.......does your car dealer explain to you that your car may kill you if you crash? no, because he doubts it will happen.

T

ps- the "a bloke bet on a donkey and beat the fund manager/ my mates chimp choose better stock" twaddle is all very funny when dragged out in a 3 year bear market. ifthe chimp had bought some Microsoft stock in the 80's or got himself into a managed fund in the mid 90's he'd not be working for some **** journalist who cant think of anything better to do than highlight the fact the market is on a downer right now. They may as well watch Schumacer in the middle of a spin off track- explain how their granny could hit a tyre wall- and that therefore Granny Jones is better than an F1 driver.

i've lost a couple of grand on shares in the past 5 years or so!!
mind you, i'd have only have pi55ed the money up the wall.

so called investments are dodgy things.

i know its not quite the same, but economic factors contribute to this whole landslide globally.

best keep your money under your bed!!!
mind you, i havent got any!! (wife & babybeemer have cleaned me out)

BB:)