Bank bungle robs children

By DAILY MAIL REPORTER
Updated:

 

NatWest, one of Britain's largest banks, this week admitted to mismanaging spectacularly £31,000 it was entrusted with by a grandmother who left money for her two young granddaughters in her will. The results of its inaction and poor handling have cost the trust fund thousands of pounds - but the bank has still taken fees of more than £2,500.

The story has emerged just a week after Money Mail reported on NatWest's mismanagement of an elderly lady's portfolio which landed her with a massive capital gains tax bill of £15,000. Lucy Taylor was persuaded to have her share portfolio sold and re-invested in a range of NatWest unit trusts.

This week's case concerns the estate of Mary Arnold, who died in September 1995. Under her will she left £31,000 in trust for her granddaughters, Ciara, 12, and Talia Janson, six. Her will stipulated that the money was to be managed by NatWest Wealth Management, part of NatWest.

Mary's daughter, actress Debbie Arnold and her actor husband David Janson tried in vain over the past 18 months to find how much the estate is worth. To their dismay, they have now found that there is just £25,840 left. And worse, only after the intervention of Money Mail did the couple find out that none of the money had been invested until last July: That's more than three and a half years after NatWest took charge of the money.

Instead, all the money had been sitting in cash: For much of the time in a NatWest Premium Reserve account which currently pays just 2.5% gross (2% net). Today, just £14,542 is invested and the rest - £11,297.53 - is still in cash. Of the original £31,000 from January 1996, just over £2,000 was withdrawn a month later by Debbie for school fees and then there was a £6,000 loan paid out in November 1997 but repaid in July 1999.

Even if you assumed that just £23,000 was available in January 1996 - the £31,000, minus the £8,000 withdrawn but ignoring the £6,000 repaid - then if it had been put into the FTSE 100 in January 1996 it would have grown to £46,920.

A spokeswoman for NatWest Wealth Management said: 'We have investigated this case and we don't cover ourselves with glory. The book keeping was not all that it should be. The figures show that there is £25,840 left of the £31,000.

'We need to find out why the money wasn't invested earlier, although that's not an adequate defence. We need to take remedial action to put the estate back to what it would have been had the money been invested in January 1996.'

She added that NatWest will also be looking to compensate Debbie and her family for all the trouble involved. 'We fully recognise that this has not be handled as well as it should have been and we will be looking towards paying compensation.'

But the offer NatWest has come up with is that the trust should now be worth just £36,551 and it will make up the shortfall. It has worked this figure out by using a number of different indices including the FTSE All Share. And on top of that, it is offering Debbie and David just £500 compensation.

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