Tag: Blevins Franks

Armed Against Pension Scams in Spain
In the past decade, millions of pounds of pensions and life savings have been destroyed in Spain. Much of this has involved insurance bonds (OMI, SEB and Generali) – as well as all other popular expat countries. Only by benefitting from lessons learned so painfully by those who’ve already been scammed, can new potential victims arm themselves against the scammers.

Pension scams always start with a so-called “financial adviser” or “wealth manager” or “retirement consultant”. Sadly, it is almost always British “advisers” which scam British expats.

Potential victims need to understand what to look out for – and avoid. Here are the essential “must haves” for proper, professional financial advisers (in other words people who sell advice, not products):
- LICENCE – The firm must be licensed – both for insurance and for investment.
- QUALIFICATIONS – The adviser must be qualified – and a link to proof of the qualification clearly visible on the firm’s website.
- LEGACY – There must be no legacy of previous scamming within the firm.
- INSURANCE – There must be a professional indemnity insurance policy in place.
- NETWORK – If the firm is an agent of a network, there must be an up to date copy of the agency agreement freely available.
- INSURANCE BONDS – The firm must not sell insurance bonds illegally.
- UNREGULATED FUNDS AND STRUCTURED NOTES – The firm must not invest clients’ funds in unregulated or esoteric funds, or structured notes.
- COMPLIANCE – There must be a proper compliance function in place.
- MANAGEMENT AND TEAM – All members of the team must be clearly visible on the website – along with details of who is in charge and responsible for the firm’s activities and compliance.
- COMMISSION POLICY – The firm’s policy on undisclosed commissions must be clearly visible.
When I Googled the term: “Financial Adviser Spain” just now, the top results that came up for me were:

Blacktower Wealth Management

Blevins Franks

Finance Spain – Patrick Macdonald

Spectrum IFA

Chorus Financial

Abbey Wealth

Alexander Peter

Axis Consultants

Logic Financial Consultants

Harrison Brook

Seagate Wealth

When I changed the search term to: “Pension Advisor Spain” or “Wealth Advisor Spain” I also got the following:
- deVere Spain
- Mathstone Financial Management
- Pennick Blackwell
- SJB Global
- United Advisers Group
- Indalo Partners
- Trafalgar-International
- Fiduciary Wealth Management
And one firm which won’t come up at all, no matter how hard you search, is:
- Roebuck Wealth – run by Paul Clarke
Plus one which only comes up if you know what to search for:
- Callaghan Financial Services
And, of course, the two which have closed down:
- Continental Wealth Trust – aka Continental Wealth Management
- Premier Pension Solutions
So let’s take a look at some of these firms to see what we can learn from their websites and see if there are any warning signs for potential victims:

Blacktower Wealth Management – Always look at the bottom of a firm’s website to read the small print and see how the firm is licensed. Blacktower is licensed by the Gibraltar Financial services Commission for both insurance mediation and investment advice. Why Gibraltar? Why not Spain? Gibraltar has a long history of facilitating and licensing scams and scammers and the Commission even employs one itself. The website claims to have “Consultants throughout our offices in Europe” – and this worries me. What is a “consultant”? Why not talk about advice, not consultancy?

Looking at the directors and “international financial advisers” of the firm, there are quite a few. Associate Director Tim Govaerts claims to be qualified with the Chartered Institute of Insurers up to Level 3. But the CII register says they’ve never heard of him. Richard Mills claims to be qualified with both the CII and the CISI, but both registers say they’ve never heard of him. Quentin Sellar claims to be qualified with both the CII and the CISI, but only the latter has heard of him. Clifford Knezovich also claims to be qualified with the CISI but does not appear on the register. Lucia Melgarejo is another member of the team who also claims to be qualified. I met her a few years ago, when a colleague of hers had cold called me, and she told me that she was too busy selling to get qualified.

The member of the Blacktower team which worries me the most is Terry Tunmore – as he was one of the scammers at Stephen Ward’s Premier Pension Solutions. Tunmore certainly soils the reputation of this firm, and should not be employed by any firm holding itself out to be professional and to have integrity.

Under the Licensing section of the website, the firm is immediately getting potential clients warmed up to insurance bonds and “wrappers” – and states that it has permission to recommend them and provide investment advice on the underlying portfolios. This should worry any potential client – and ring loud alarm bells – as this indicates a clear intention to use bond providers such as Quilter, SEB, Generali or RL360 – and earn hidden commissions. These products are deemed to be invalid under Spanish law, and are routinely sold illegally in Spain.

Blacktower’s website makes no mention (that I can find) of compliance or their professional indemnity insurance policy. It also worries me that Blacktower has so many “agents” – and without hard evidence of a robust compliance function, I think there is a risk that some of these agents could well be acting as unsupervised “feral” salesmen, rather than bona fide financial advisers.

Blevins Franks – Well-known firm with offices in Spain, and other European countries. The team in Spain all have titles such as Partner, Private Client Manager or Regional Manager – and there is no mention of any of them being genuine financial advisers. In Spain, Partners Christopher McCann, Brett Hanson, Paul Montague, Andrew Southgate, Henry Rutherford and David Bowern all claim to be qualified with the London Institute of Banking & Finance, but none of them appears on the member register. Steven Langford claims to be CII qualified but does not appear on the register. With so many members of the team claiming – falsely – to be qualified, this should ring loud alarm bells with any potential victims. We know that Blevins Franks routinely puts all clients into a Lombard insurance bond – which means they are committing a criminal offence in Spain.

Insurance bonds are illegal and invalid for the purpose of holding investments in Spain, and the usual manner of selling them is also a criminal offence. An insurance bond provides no benefits or protection for investors – and should never ever be used inside a pension (QROPS). Blevins Franks also has a close tie with Russell funds – and routinely invests their clients’ funds in Russell. There’s nothing bad about Russell – but there’s nothing good about them either. A portfolio should always be a well-spread mixture of funds from the whole market – not a narrow selection of investments from one provider. I can’t see any information on the Blevins Franks website about their professional indemnity insurance, compliance or commission policy. All in all, I think there are too many risks with this firm and it should be avoided.

Finance Spain – Patrick Macdonald – This firm comes high up the Google rankings, so obviously spends a lot of money on SEO and/or Google Ads. The “Regulation” bit on the website states the firm is “part of a group who are regulated by the Financial Services Commission in Gibraltar”. But which “group” is it talking about? There’s a link to the GFSC website, but no evidence as to how the firm is licensed. The website also claims to consist of “qualified and regulated international wealth managers and members of the Chartered Institute for securities and Investment (CISI) in the UK”. But who are these so-called wealth managers? The only one named on the website is Patrick Macdonald – and the CISI register shows him as being employed by Blacktower. But the firm Finance Spain does not appear on the GFSC register as being one of Blacktower’s agents – so how is this firm licensed?

What worries me most about this website is that it is openly flogging insurance bonds. It promotes “Spanish Portfolio Bonds” – which are routinely sold illegally by the scammers. It claims these bonds are a “tax beneficial home for investments”. But that isn’t true in Spain, as the so-called tax benefits only work for UK residents. In the “Wealth” section of the website, you are met with a brazen offer of insurance bonds from Prudential, Old Mutual and SEB. The section on pension transfers is also very worrying as it gives misleading comparisons between UK pension providers and EU-based QROPS providers; it fails to provide warnings against transferring final salary pensions and – worst of all – states “There is greater investment choice”. This so-called choice is what so many scammers in Spain (in the past ten years) have used to destroy victims’ pensions with high-risk, high-commission, unregulated investments such as structured notes.

Ironically, the Finance Spain website has a section called “Top 5 Warnings” about pension scams. It recognises that the industry is rife with scammers and warns about cold calling, cashing in pensions, pension reviews and the promise of high returns. But it ignores the fact that Finance Spain is itself heavily promoting insurance bonds – which have been the biggest single cause of pension scams in Spain in the past decade. With no clear information about licensing, compliance, insurance or commission policy – and no idea who the firm is or by whom it is managed – I think it is safe to say this is one to avoid.

Spectrum IFA – Oh dear, where to begin! There are so many alarm bells here, it’s like being inside a busy fire station. No investment license, but openly giving investment advice, and flogging insurance bonds: “efficient investing (using Insurance wrappers”. And that’s just the home page. The website openly boasts: “Our internationally qualified, professional advisers make certain you receive the best possible advice for the following areas: Investment Advice in Spain – Pension planning in Spain. That’s a bold claim to make for a firm with no investment license.

The website goes on to boast: “All our advisers live in Spain, are experienced and qualified.” But who are they? What are their qualifications? One “financial adviser” is Dennis Radford who claims to be qualified with the CISI – but does not appear on the register. Aside from lying about his qualifications, he is one of the former Continental Wealth Management scammers responsible for defrauding many victims out of their pensions and life savings. I have brought this to Spectrum’s attention before, but they obviously don’t care – as Radford brings in a lot of business and commission (on illegally-sold insurance bonds and high-risk, inappropriate investments).

There is one adviser who is qualified with the CII – John Hayward. I believe he is a decent bloke – so what on earth he is doing with Spectrum is beyond me. Spain may be full of inadequately licensed firms which do nothing but flog insurance bonds to victims who don’t need them and can’t afford them, but there are some (admittedly not many) decent firms he could join.

Abbey Wealth – This firm has been around a long time – flogging insurance bonds to unsuspecting victims. The firm was an agent of well-known scammers Inter Alliance – the “network” of which Continental Wealth Management was also a member. Abbey Wealth is now licensed by the Central Bank of Ireland. If you’ve ever wondered why so many firms like Ireland, it’s because regulation there is as flaccid as a marshmallow. Another reason why Quilter International is so active there with its insurance bonds – so beloved of so many pension scammers. Abbey boasts a flock of “advisers” who claim to be passionate about financial services – including Ben Noifield who states he is CII qualified (the CII register says otherwise). The rest of the sorry team are an assortment of unqualified salesmen masquerading as advisers.

No mention of professional indemnity insurance, and no reference to their murky past as part of the Inter Alliance shambles.

Alexander Peter – No information about if or how the firm is licensed; who the advisers are and whether they are qualified; who is in charge, what professional indemnity insurance they hold.

Harrison Brook – This firm claims to be a member of the Nexus Global network. But there is no access to the agency agreement and no link to any professional indemnity insurance details or information about who is in charge and who the “advisers” are (and whether any of them are qualified). The question also has to be asked: why don’t firms get their own license rather than joining a network? Ding dong!

Seagate Wealth – No information about how (or if) this firm is licensed. It states on the website: “We work in conjunction with fully regulated and authorised companies”. So presumably that’s an admittance that they are not regulated or authorised. There’s no information about who controls and is responsible for the firm, and nothing to state how any of the team members are qualified. Perhaps one of the biggest alarm bells about this lot is that they are mostly ex AES International and stole the Spanish client book back in 2015.
January 8, 2021
Blevins Franks Cock Up

Blevins Franks has reported Pension Life for defamation on LinkedIn – a right old cock up as all I did was state the facts and the truth as defined by Spanish law and regulations.

IT IS ILLEGAL FOR BLEVINS FRANKS TO SELL LOMBARD INSURANCE BONDS IN SPAIN

Dear Blevins Franks. I am very upset about the Blevins Franks cock up with LinkedIn. You think I’ve written something defamatory, so I am very sorry.

But sorry as I am, you – Blevins Franks – are going to be a whole lot sorrier when you get prosecuted for selling insurance bonds. The Spanish insurance regulator has made a clear judgement: that all insurance products must be sold in accordance with the Spanish insurance regulations. And Blevins Franks is contravening the regulations.

What I have written in a post on LinkedIn is 100% factually correct: “It is also difficult for advisers to change course now that it is official that it is illegal – as in a CRIMINAL OFFENCE – to sell death bonds (such as Lombard) in Spain.”

And my subsequent question was entirely reasonable: ” So who can tell me if the same is true in Portugal (and France and other European countries)?”

You obviously didn’t know how to contact me – I am sorry if it is confusing but I hide my contact details on the CONTACT page of the Pension Life website. Email, phone number, physical address, the works. So why contact LinkedIn? They didn’t write the post? Getting my LinkedIn account suspended isn’t going to change the bald fact that Blevins Franks is breaking the law.

If Blevins Franks doesn’t like Spanish laws, they should complain to the Kind of Spain – not to me (or LinkedIn)

We are lucky in Spain because regulations are taken seriously. If they are contravened, that is a criminal offence. Blevins Franks is selling insurance bonds (Lombard) illegally. I have pointed this out before, but they didn’t take any notice. Which is a shame because Blevins is a properly-regulated firm with qualified advisers. So why break the law?

So, Blevins Franks, if you don’t like the laws of Spain please don’t complain to me or to LinkedIn. Complain to King Felipe, the Spanish government and the Spanish insurance regulator.

Or even better – stop breaking the law and selling Lombard insurance bonds illegally!

Blevins could just have picked up the phone instead of complaining to LinkedIn!

June 29, 2019
Fighting pension scams – Qualifications
Fighting pension scams needs to be done logically and methodically. Decent advisers need to use high standards to help fight scams. If these standards become the norm, the scammers won’t survive and flourish so easily.

Fighting pension scams – Qualifications

Most qualified advisers want nothing to do with pension scams. Many offshore firms employ advisers who have not passed the required exams. Even if an adviser has qualified, he or she must still be registered. We recently surveyed a number of offshore advisory firms:

Belgravia Wealth Square Mile Robusto Spectrum Blevins Franks Seagate Wealth Woodbrook Group Globaleye

Lots of offshore advisers consider they don’t need to be qualified. Let’s have a look at an example:

The Chartered Institute for Securities & Investment (CISI) is the largest and most widely respected professional body for those who work in the securities. The Chartered Insurance Institute (CII) is a professional body dedicated to building trust in the insurance and financial planning profession.

All financial advisory firms should list their advisers, provide clear details of each adviser’s qualifications and a link to the institute’s register showing evidence of the qualifications.

Here is a useful guide to qualifications: Qualified Adviser for QROPS

“Qualifications are not the be all/end all. A certificate does not prove professional competence in the field , ethics or experience. But the public have to start their due diligence somewhere.”

Sadly, there are a few well qualified advisers who are the exception to the rule. Stephen Ward of Premier Pension Solutions ran numerous scams:

Ark Evergreen Capita Oak Westminster Southlands Headforte

Randwick Estates Bollington Wood Hammerley Halkin Feldspar

and many others such as Westminster and London Quantum – ruining thousands of lives. Several of his schemes are under investigation by the Serious Fraud Office. He also provided the transfer advice in the Continental Wealth scam.

Any decent adviser will want to be fully qualified. And registered. The rest should go back to selling snake oil. But consumers must remember there are exceptions. Some regulated firms get it wrong. Qualified advisers can get it wrong.

The trick is to know all the questions to ask. Here’s where the ten standards come in handy:
1. Firm must be fully regulated – with licenses for insurance and investment advice
2. Advisers must be qualified to the right standard pension-life.com/ten-essential-standards-for-pension-advice
3. Firm must have Professional Indemnity Insurance
4. Clients must have comprehensive fact finds and risk profiles
5. Firm must operate adequate compliance procedures
6. Advisers must not abuse insurance bonds
7. Clients must understand the investment policy
8. All fees, charges and commissions must be disclosed
9. Investors must know how their investments are performing
10. Firm must keep a log of all customer complaints
Fighting pension scams – why qualifications are so essential

If clients used only firms that tick all ten Standards boxes, it would be harder for the scammers to get business. Decent firms who care about their reputation should make sure there are clear links to all advisers’ qualifications. Make it easy for the consumer to understand how to check that the stated qualifications are genuine. And help educate people to understand what qualifications are required.

All too often, advisers claim to have qualifications that don’t exist – or that aren’t appropriate for investment advice. For example, some advisers who are assuring clients they can advise on pensions and investments, only have qualifications suitable for mortgages. Or worse still, no qualifications at all. Whatever the adviser says his qualifications are, the client must be able to double check.

You wouldn’t go to an unqualified solicitor would you? So don’t use an unqualified financial adviser. Being qualified goes hand in hand with being regulated.
May 8, 2019
No more bogus life assurance policies in Spain
The Spanish Insurance Regulator – the DGS (Dirección General de Seguros y Fondos de Pensiones) – has made a most welcome judgment. This outlaws the mis-selling of bogus life assurance policies as investment “platforms” – aka “life bonds”. Read the translated summary below.

The iniquitous practice of scamming victims into these expensive, pointless bonds – so beloved by the “chiringuitos” (scammers) on the Costa Blanca and Costa del Sol for many years – will now result in criminal convictions for the peddlers of these toxic products.

The DGS’ judgment has provided reinforcement to the earlier Spanish Supreme Court’s ruling that life assurance contracts used to hold “single-premium” investments are invalid. This heralds a huge step forward in cleaning up the filthy scams which have for so long proliferated in popular British expat communities – making the victims poor and the perpetrators rich. This evil practice came to a head when scammers Continental Wealth Management collapsed in a pile of debris in September 2017. The main perps: Darren Kirby, Dean Stogsdill, Anthony Downs, Richard Peasley, Alan Gorringe, Neil Hathaway, Antony Poole all ran for the hills. Other scammers who played supporting roles – including Stephen Ward, Martyn Ryan and Paul Clarke – slithered away quietly to ply their scams elsewhere.

The DGS ruling has opened the way for criminal prosecutions against all those at Continental Wealth Management who profited so handsomely from flogging “life bonds” by Old Mutual International (aka OMI and Royal Skandia), Generali and SEB. While it goes without saying there will be a hearty cheer about the jailing of Darren Kirby and his merry men, they will soon be joined by other individuals who have joined in the bogus life insurance fest just as enthusiastically. And, of course, the life offices – from OMI, Generali and SEB, to Friends Provident and RL360 – will be treated to a proceeds-of-crime party.

Guest of honour will, of course, be Peter Kenny of OMI. But just to make sure nobody feels left out, Hansard and Investors Trust will certainly get their invites. Maybe Wormwood Scrubs will set up their own wing for life-office scammers.

It has long seemed curious that such a delightful part of Spain as the Costa Blanca should have fostered such an evil industry. From the arch scammer himself – Stephen Ward of Premier Pension Solutions, and his many associates including Paul Clarke who was helping him flog Ark before he joined CWM to learn to scam on a much larger scale. But anywhere along that delightful stretch of coastline running from Valencia to Alicante there are dozens of firms giving the life bond machine plenty of welly.

So popular is the use of life bonds among the seedier sector of the financial services industry, that multi-national firm Blevins Franks have their own their “exclusive” offering of bogus Lombard bonds. And you can see why: these scammers earn 8% from flogging these bogus life assurance policies. That’s 8% for doing nothing – and for trapping their victims into paying back this commission over up to ten years. Often long after the victims have worked out that the bond serves no purpose except to prevent the funds from ever growing.

The victims themselves – hundreds of which lost most (or in some cases all) of their life savings to Continental Wealth Management – will indeed see the DGS’ ruling as wonderful news. They will certainly celebrate the fact that justice has at last prevailed and that the law in Spain has made it clear that selling life assurance policies the traditional scamming way is illegal.

Continental Wealth Management (CWM – “sister company” to Stephen Ward’s Premier Pension Solutions) was set up initially to provide the cold calling and lead generation services to support Ward’s many scams – including the Evergreen (New Zealand) QROPS scam. Evergreen was swiftly followed by the Capita Oak and Westminster scams (now under investigation by the Serious Fraud Office). Unregulated, and staffed by unqualified salesmen who took it in turns to sport grand titles such as “Managing Director” and “Investment Director”, most of these spivs had been car salesmen or estate agents before flogging QROPS and life assurance contracts used to hold the toxic structured notes which destroyed so many millions of pounds’ worth of the victims’ life savings. Many of these bonds were supplied by Old Mutual International, who despite the huge losses on the funds, continued to take their fees monthly.

Back in April 2018, OMI and the IOM were defeated by Spanish courts ruling that the jurisdiction in litigation against them for facilitating financial crime should be in Spain. This was a welcomed victory for the victims in the face of so much corruption and fraud in Spain for many years. It is certainly a turning point in the quest for justice by the thousands of victims of scammers such as Continental Wealth Management and life offices such as Old Mutual International, Generali and SEB.

I will be writing to all advisory firms who are selling life bonds to victims in Spain to advise them that this is now a criminal matter and to warn them that they will be reported to the DGS.

————————————————————————————————————————————————————–

Madrid, 10 January 2019

General Directorate of Insurance and Pension Funds (DGS)

Complaints service file number 268/2016

COMPLAINT BY A CONTINENTAL WEALTH CLIENT IN RESPECT OF HEAVY LOSSES INCURRED ON HIS PENSION TRANSFERRED TO A BOURSE QROPS AND PLACED IN A GENERALI INSURANCE BOND.

The Directorate General of Insurance and Pension Funds is competent under the powers conferred on it by Article 46 of Law 26/2006 of 17 July, on the mediation of private insurance and reinsurance, to examine the claim formulated for the purpose of determining non-compliance with current regulations on the mediation of private insurance and reinsurance, and whether this is decisive for the adoption of any of the relevant administrative control measures, particularly those of administrative sanction, which contravene the aforementioned Law.

Article 6 of Law 26/2006, of 17 July, on private insurance and reinsurance mediation, which regulates the general obligations of insurance intermediaries, states:

“Insurance intermediaries shall provide truthful and sufficient information in the promotion, supply and underwriting of insurance contracts, and, in general, in all their advisory activity….”

Article 26 paragraphs 2 and 3 of Law 26/2006, of 17 July, on private insurance and reinsurance mediation, which refers to insurance brokers, establishes the following:

“Insurance brokers must inform the person who tries to take out the insurance about the conditions of the contract which, in their opinion, it is appropriate to take out and offer the cover which, according to their professional criteria, is best adapted to the needs of the former. The broker must ensure the client’s requirements will be met effectively by the insurance policy.”

Article 42 of the Private Insurance and Reinsurance Mediation Act, which refers to the information to be provided by the insurance intermediary prior to the conclusion of an insurance contract, provides:

“Before an insurance contract is concluded, the insurance intermediary must, as a minimum, provide the customer with the following information:
1. a) The broker’s identity and address.
2. b) The Register in which the broker is registered, as well as the means of verifying such registration.”
Insurance agents must inform the customer of the names of the insurance companies with which they can carry out the mediation activity in the insurance product offered.

In order for the client to be able to exercise the right to information about the insurance entities for which they mediate, insurance agents must notify the client of the right to request such information.

Banking and insurance operators, in addition to the provisions of the previous letter, must inform their clients that the advice given is provided for the purpose of taking out an insurance policy and not any other product that the credit institution may market.

Insurance brokers must inform the client that they provide advice in accordance with the following obligations:

“Insurance brokers are obliged to carry out and provide (to the customer) an objective analysis on the basis of a comparison of a sufficient number of insurance contracts offered on the market for the risks to be covered. Brokers must do this so that they can formulate an objective recommendation.”

On the basis of information provided by the customer, insurance intermediaries shall specify the requirements and needs of the customer, as well as the reasons justifying any advice they may have given on a particular insurance. The intermediary must answer all questions raised by the client regarding the function and complexity of the proposed insurance contract.

All intermediaries operating in Spain must comply with the rules laid down for reasons of general interest and the applicable rules on the protection of the insured, in accordance with the provisions of Article 65 of the Law on the Mediation of Private Insurance and Reinsurance.

Every insurance intermediary is obliged, before the conclusion of the insurance contract, to provide full disclosure. In the event that a mediator was an Insurance Broker or independent mediator, he is also obliged to give advice in accordance with the obligation to carry out an objective analysis. This must be provided on the basis of the analysis of a sufficient number of insurance contracts offered on the market for the risks to be covered. The mediator can then formulate a recommendation, using professional criteria, in respect of the insurance contract that would be appropriate to the needs of the client.

In the case in question, there is no evidence that the aforementioned information was provided to the client before the investment product was contracted. Therefore, Article 42 of the regulations has been breached.

Therefore, this Claims Service concludes that the mediator must justify the information and prior advice given to his client, so that the obligations imposed by the Law of Mediation can be understood to be fulfilled with the aim of protecting the insured. Failure to comply with their obligations could be considered as one of the causes of the damage that would have occurred to their client.

The claim is understood to be founded. In the opinion of this Claims Service, the mediating entity has committed a breach of the regulations regulating the mediation activity – specifically of the provisions of articles 6 and 42 of Law 26/2006 of Mediation of Private Insurance and Reinsurance.

The DGS requires the mediating entity to account to this Service, within a period of one month from the notification of this report, for the decision adopted in view of it, for the purposes of exercising the powers of surveillance and control that are the responsibility of the Ministry of Economy and Enterprise.

The interested parties are informed that there is no appeal to this judgment. Both the claimant and the mediating entity are made aware of their right to resort to the Courts of Justice to resolve any differences that may arise between them regarding the interpretation and compliance with the regulations in force regarding the mediation of private insurance and reinsurance, in accordance with the provisions of articles 24 and 117 of the Constitution.

Chief Inspector of Unit

Ministry of Economy and Enterprise

Secretary of State for the Economy and Business Support
February 17, 2019
COSTA SCAM – THE COST OF “ADVICE” IN SPAIN
Sadly, Spain – the leading British expat destination in Europe – is rife with scams and scammers. The Costa Blanca, Costa del Sol, Costa Brava and everything in between are crawling with what the Spanish regulator calls “chiringuitos” – literally “bar flies”. And you can see why: wherever there is food – whether fresh or rotting – they congregate in large swarms. They are not proud – they will nibble your chips while still on your fork; sip your sangria off your straw; suck the sweat off your shirt and crawl into your underpants to see if there is anything tasty in there.

At least the flies have a little more dignity and respect.

Becoming an expat in Spain is fraught with difficulty. First, you have to learn to drive on the wrong side of the road, then you have to learn Spanish – or Valenciano or Catalan (you can see why so few Brits bother). Then you have to come to terms with the heat: long, hot summers with temperatures well up into the 30s and 40s are fine if all you have to do is lounge beside the pool, drink beer and plan your next outing to the local chippy. But if you are working, being too hot all day is no fun.

Many Brits are naturally suspicious of the Spanish and seek out British professionals whenever they can: builders, plumbers, pool maintainers, car mechanics and manicurists. And you can understand why – most Brits can barely manage things like “my loo won’t flush”, “the pool’s turned green”, “our car won’t start (or stop)” and “I want nails like Kim Kardashian”. So when it comes to “how do I invest my life savings” they don’t really stand a chance.

The problem is that most Brits in Spain are outside their comfort zone. They are in a foreign country and so they cosy up to other Brits because that makes them feel safe – and they don’t quite trust the natives anyway. Quite apart from the language barrier, Spanish bureaucracy can seem somewhat intimidating and, well, foreign. So when it comes to managing their life savings and retirement provisions, the Brits either actively seek out British advisory firms or feel relieved and happy when they are cold-called by them.

There’s no shortage of “advisers” – they lurk everywhere: bars, supermarkets, golf and sailing clubs. They are typically charming, well-dressed, friendly and fall over themselves to sell financial advice or what they call “wealth management”. Only that isn’t what they are selling: they are actually selling products. These products are basically insurance bonds (that you don’t need) and investments (that you don’t want). And huge fees for selling you things that you neither need nor want.

With appealing adverts and websites showing happy, good-looking couples with nice teeth, expensive yachts and fast cars. These chiringuitos sell the idea that somehow they can make people wealthy and happy in retirement.

The reality is that the chiringuitos make themselves rich by fleecing their victims and destroying their funds.

Before the industry cries “unfair, unfair!!”, let me just mention a couple of examples that prove my point:

Premier Pension Solutions (Costa Blanca) – Ark £27 million; Evergreen £10 million; Capita Oak £10 million; London Quantum £3 million

Continental Wealth Management (Costa Blanca) – £100 million

That’s at least a couple of thousand people financially ruined. There are plenty more examples:

* How rogue ‘financial advisers’ in Spain stung British pensioners for millions

* Shocking Expat Financial Scams – Don’t Become A Victim

* British expats, your financial adviser may well be a bandit

* Spain still hub for expat financial fraud

There’s quite a wide spectrum – ranging from out and out scammers like Premier Pension Solutions and Continental Wealth Management, to firms that are just plain dodgy, expensive, dishonest and irresponsible. You may ask what the difference is: in practice NONE. Both ends of the spectrum cause damage to the funds – and distress to the victims.

Let’s look at the reality and examine what many advisory firms (chiringuitos) do and don’t do. We will take the don’ts first:
- they don’t disclose all the fees up front
- they don’t disclose how much commission they will earn from your funds
- they don’t respect your risk profile – and can invest you in high-risk stuff when you are a low-risk investor
- they don’t tell you when the answer to the question “do I need a QROPS” is “no”
- they don’t respect the basic principles of diversity, risk, liquidity and cost
- they don’t disclose whether the firm is regulated
- they don’t disclose whether they are qualified
and now what they do:
- they transfer your pension into a QROPS whether that is in your interests or not
- they put your funds into an insurance bond even though you don’t need one
- they invest you in what they have already decided they want to sell you – irrespective of whether that is what you need
- they churn your investments to maximise their commissions
- they lie about your losses (only “paper” losses)
- they stick you in an expensive insurance bond which will cost you a fortune to get out of
There are, of course, multiple variations on this theme – including things like flogging you whatever fund pays them the most commission that month; flogging you their own fund; flogging you your own grandmother – twice. They flog funds with entry fees, exit fees, ongoing fees and lousy performance. Basically, these advisers have no interest in keeping their clients long term – they are only interested in the initial fees. Once the client realised they have been fleeced, he can take his business elsewhere – unless the firm is Blevins Franks, in which case the victim is stuck with them.

I am often asked the question: “are there any firms you can recommend which won’t rip me off?”. The answer to this question is a resounding “maybe”.

There are a few I can categorically recommend against:

Callaghan Financial Services – unregulated

Blevins Franks – unscrupulous

Abbey Wealth – unregulated and unscrupulous

Seagate Wealth – unmentionable
October 21, 2018
RUSSELL UP CLIENTS FOR BLEVINS FRANKS

Watch out – Blevins Franks will probably sell you a pup if you’re not careful!

Blevins Franks – a so-called financial advisory firm in Spain and other places around the Med – might (hopefully) offer me a job. I quite fancy trying my hand at being a financial adviser, so I’m practicing cheesy smiles and earnest but friendly poses. Over the weekend I’m going to rehearse some elevator pitches and killer closing offers for my interview with Blevins Franks:

“Any fund you like – as long as its a Russell fund”

“Shall I Russell up some coffee while you browse through our catalog of funds (it won’t take you long – we only sell one fund!)”

“Autumn is my favourite time of year – I just love the Russell of fallen leaves”

“I adore your Jack Russell (the one that slobbered on my new trousers) – I might just Russell him on my way out”

While I’m on a roll, I might try a real joke or two:

“What do you call a man under a pile of leaves? Russell! What do you call a man under a pile of leaves for a thousand years? Pete!”

(I just hope my prospective clients aren’t called Russell and Pete).

I’m sure I’ll be able to think up plenty more jolly quips, and I reckon I’ll soon have dozens of potential clients eating out of my hand and desperate for the chance to invest their life savings in Russell funds. The only thing I’m not sure of, is how to sell them on the concept of going into a Lombard bond. What do I say the benefits are? Of course, I know what the benefits are to me: I will earn 8% commission – but what line do I spin the client?

* It will give you capital protection (by protecting your capital from growing too fat)

* It will give you the best and widest selection of funds (as long as they start with a Rus and end with a Sell)

* It will help reduce the appearance of wrinkles and fine lines (and growth)

* It will pay me lots of commission (oops – better not say that!)

I’m going to do some homework before my interview so I know the Russell funds inside out – so over to good ol’ Morningstar.

Let’s start with the Russell Real Assets Fund. I won’t mention that it is down 3.8% this year (2018) or that it is performing way below the benchmark, but I will stress that this fund is a bargain at just 3% to buy into and a mere 2.01% a year ongoing. (Probably best not to mention that if somebody bought it direct they could get it for free and pay only 1.26% a year).

Then I’ll move on to the Russell Openworld Global High Dividend Equity Fund (better stay sober to get that one right) – a steal at only 5% to buy into and 2.02% a year once you’re in. Then, just to show I know what I’m talking about, I’ll give ’em the killer Russell Asia Pacific Ex Japan Fund – another steal at 5% to get in, and 2.8 a year to stay in. I won’t mention that both these funds are half the price if you buy them direct – because this is after all about my commission and not about trying to sell them something cheap or suitable.

If I really want to impress my prospective victims, I could go on and on: “Russell Emerging Markets Equity Fund, Russel US Equity Fund, Russell Global Real Estate Securities Fund….”. I could even invent some of my own: “Russell Falling Leaves Fund, Russell Falling Value Fund, Russell Falling For It Fund…”

The best thing about working for Blevins Franks, of course, is that you get paid twice: once for flogging the Lombard bond, and then again for flogging the Russell fund – a “double hussle” (or even a “Russell hussle”!). I can’t wait.

But what, you may ask, if Russell and Pete suss out that I’ve conned them after they see their funds stuck in this useless, pointless, expensive bond and realise they could have bought the Russell funds way cheaper elsewhere – or could have just bought better funds to start with? The answer is simple – just listen to my favourite song: Hotel California by The Eagles: “You can check out any time, but you can never leave”.

You see, clients in Spain don’t realise that when they get conned into a Lombard Insurance Bond they have to stay with Blevins Franks no matter how badly the funds inside the bond perform? No other IFA in Spain is allowed to take over managing the funds if an investor is not satisfied with Blevins Franks. So Russell and Pete will be stuck with me forever – unless they fancy paying a huge exit penalty (so it will cost them a fortune to get rid of me!).

Never mind treating customers fairly – we’ll lock them into a cripplingly-expensive insurance bond which is illegal in Spain and fleece them with expensive, poor-performing funds they could buy way cheaper anywhere else. And Russell and Pete can do nothing about it.

In the words of the best band in the world: “On a dark desert highway, cool wind in my hair, I was thinking to myself this could be heaven and this could be hell, such a lovely place to listen to the Russell of crumpled pound notes….”

Just goes to show, even with a load of qualified advisers, victims can still get scammed.

October 19, 2018
Qualified & registered? We do not need to be – we are offshore!
Pension Life followers will know that we have been conducting a series of blog investigations – “qualified & registered?” into offshore pension companies offering financial advice for retail pension investments. Some of the data we have collated is rather worrying – the purpose of this blog is to rank the companies in order of their scores.

The blog series certainly seems to have caused a stir among these companies with one company stating that the CII is an old company and that if you work offshore you don’t need to be registered within the UK. They state that there are other qualifications that mean you are able to give pension advice.

At Pension Life we believe that all financial advisers should be appropriately qualified as well as registered with the institute from which they gained their qualifications. If they are a good, trustworthy FA then why would they object to these requirements? With so many rogues out there, and the figures of financial fraud totting up to millions, an honest FA should be proud for their name to appear on all the professional institutes’ registers to which they claim they are qualified.

We feel strongly that even if your company is based offshore, if you are working with UK pensions then you need to be qualified and registered to UK standards – and nothing less.

The three professional institutes’ qualifications needed to be properly qualified to advise on pension planning are:
- CII
- CISI
- LIBF
and the qualifications need to be at least level 4 – if not level 6.

More information about these qualifications can be found in our blog Qualified or not qualified? That is the question. Whilst a person can obtain a qualification in financial advice, they must obtain a certain level to be able to advise on pensions.

Belgravia Wealth – qualified and registered? 0%

Callaghan QROPS Spain – qualified and registered? 0/2 – 0%

Seagate Wealth Management Spain – qualified and regulated? 0/6 – 0%

Square Mile International Financial Services – qualified and registered? 0%

Robusto Asset Management – qualified and registered? 0%

Woodbrook Group – qualified and registered? 1/26 – 3.8%

Globaleye Dubai – qualified and registered? 3/15 – 20%

Spectrum IFA Group – qualified and registered? just 4/16 – 25%

and this is where we see the problems with fractional scamming: these companies use their unqualified financial advisers (who are more like blood sucking salesmen) to lure the customers in, then they stick them in an entirely unnecessary insurance wrapper AND then invest the victims in whatever toxic funds pay the highest commission.

Each ‘adviser’ – qualified or not – creams their bit off the top of the pension fund. Generally, this means that by the time the fund arrives at its final destination, a large chunc has been taken to cover the many fees and commissions for the various parties’ ‘hard’ work. Also, we are increasingly seeing retirement savings having two ‘wrappers’, i.e. as well as the QROPS itself, there will be an insurance bond (which will pay the slick-talking salesman up to 10% – a commission which will be carefully concealed).

Have a look at our blog 10 essential questions to ask your IFA, this blog was compiled with the help of Pension Life members who have fallen victim to pension scammers. They agree that if they had known the right questions to ask they may have avoided losing huge chunks of their pension fund.

Blevins Franks Spain are top dog in this investigation, they have scored highly with 17/19 of their advisers appearing on at least one of the three registers.

Blevins Franks Spain 89.5% qualified and registered!
July 13, 2018
Blevins Franks Spain – Qualified and registered?

Today I am investigating the Blevins Franks Spain office – let’s see how qualified and registered their financial team are. Many advisers claim to be qualified, but if they do not appear on either the CII or CISI register, you can’t check out what their qualifications actually are.

IFAs and their clients are invited to add to it, correct it, improve it. Here’s a link to the two registers if you want to double check:

http://www.cii.co.uk/web/app/membersearch/MemberSearch.aspx

https://www.cisi.org/cisiweb2/cisi-website/join-us/cisi-member-directory

Please note that this data is correct as of 9am 25/06/2018

edit: we have been informed that there is a third website we can check for qualifications, so this page is in the process of editing whilst we see if any names appear on the libf members website.

https://www.libf.ac.uk/members-and-alumni/sps-and-cpd-register

**********

David Bowern – Partner – claims he has a DipFA – Appears on libf.ac.uk

Andy Buchanan – Associate Partner – Claims a host of qualifications – IS NOT on either register – not on libf.ac.uk

Sarah Burke – Private Client Manager – IS on the CISI register as claimed – not on libf.ac.uk

Susan Cambridge – Private Client Manager – IS ON BOTH CII AND CISI registers!! – not on libf.ac.uk

Kevin Cassar – Regional Manager – Claims he is a DipFA – Appears on libf.ac.uk

Kelman Chambers – Associate Partner – IS on the CII register for Spain – not on libf.ac.uk

Robert Croizat – Senior Partner – states he is professionally qualified – does NOT appear on either CII or CISI register – DOES appear on libf.ac.uk DipFA MLIBF

Alexander Grech – Regional Manager – Claims CII but is not on register – Appears on libf.ac.uk

Brett Hanson – Partner – Claims a host of qualifications – IS NOT on either CII or CISI register – Appears on libf.ac.uk

James Johnson – Associate Partner – IS on the CII registered for Spain – not on libf.ac.uk

Simon King – Partner – Claims CII – There are several Simon Kings on the CII register but none are listed for Spain so we will assume that he IS NOT registered – not on libf.ac.uk

Steve Langford – Partner – Claims level 5 CII – IS listed on CII as international! – not on libf.ac.uk

Christopher McCann – Partner – claims a host of qualifications – There is a Christopher McCann listed on CISI but the info states that the employer is LGT Vestra limited in the UK – the CII listing for him also stated London – this makes us doubt that either listing is this Christopher McCann. – Appears on libf.ac.uk

Paul Montague – Partner – Claims a host of qualifications – IS NOT on either register – Appears on libf.ac.uk

Cathal Rochford – Private Client Manager – IS on the CISI register as claimed – not on libf.ac.uk

Javid Rustham – Associate Partner – Is listed on CII register but for London not Spain – not on libf.ac.uk

Andrew Southgate – Private Client Manager – Claims he is a DipFA but this is an Institute of Banking and Finance qualification, and as there is no public register, it is not possible to verify – – Appears on libf.ac.uk

Nicole Sandler – Private Client Manager – IS registered on CII for Spain – not on libf.ac.uk

Gerald Turner – Partner – IS on the CII register for Spain – not on libf.ac.uk

8 out of 19 qualified and registered at Blevins Franks Spain- the best yet! Incorrect data!

edit: with our new found knowledge we are very happy to write that Blevins Franks Spain now score a 17/19 for being qualified and registered we are currently talking with their office in the hope that we can change this to 19 and give them 100% – we apologise for the original content being incorrect.

Well done Blevins Franks Spain.

June 25, 2018