Spain is, sadly, the World’s capital of wealth scamming. For more than a decade, wealth planning has been perverted and converted into a commission-laden fraud. This financial crime has relieved thousands of victims of their pensions and life savings.
Originally a private Swiss bank, Julius Baer now wants to diversify into the Spanish wealth market. Hopefully, this is very good news. To date, Spain has been dominated by the dross of the commission churning machine. Some genuine, professional, qualified, fee-based financial advice in Spain would be welcome and also essential to clean up this crime-ridden territory.
Julius Baer has created a new team which includes Claudio Beretta and Claudia Linares. So just to give them a few friendly, helpful tips, here’s my message to them – which I hope they will accept in the spirit in which it is given.
If this newcomer to the Spanish market can bring proper fee-based financial advice to British expats in Spain, Julius Baer could change financial services the World over. The absurdly-stupid EU regulator: ESMA allows firms with only an insurance-mediation license to provide investment advice on portfolios held within insurance bonds. This, of course, facilitates most of the financial crime in Spain and the rest of Europe.
This widespread fraud – encouraged and handsomely rewarded by the death offices – oils the wheels of the illegal commission machine. These freely-spinning wheels result in herds of unqualified “advisers” (including drug addicts, convicted killers, prostitutes and fraudsters) conning thousands of victims out of their pensions.
This team is looking to provide services in the fields of wealth planning and wealth management. Julius Baer reports this constitutes;
“the overall Bank’s strategic conviction to further strengthen their presence in Western Europe and particularly in Spain.”
Hopefully, Julius Baer will avoid death offices and unlicensed spivs. And, even more essential to the fraud-saturated Spanish market, Julius Baer must make it clear there will be no secret or half-secret commissions involved – and concentrate purely on proper fee-based advice which is qualified and truly independent.
On the web of pension scams It seems as though criminal convictions against pension scammers might be getting popular. More than a decade has gone by with virtually none of the usual suspects getting jailed – despite a few criminal investigations (that, so far, have not resulted in convictions). Is the system really that hopeless or do these criminals just know how to work it? Probably, both. But is it getting any better?
Almost all scammers and scams are, in some way, related or connected. If the earliest scammers (circa 2010) had been prosecuted and put behind bars, much of today’s damage could have been prevented.
Now that there is an intricate web of them passing around their tricks of the trade, it’s no wonder they’ve all been able to bypass the laws and regulations.
Two scammers have, however, recently been brought to justice:
Much of the £13m ended up in the hands of well-known scammer David Austin – who committed suicide after being caught in another pension scam (using his daughter Camilla as the “front man”).
Susan Dalton & Alan Barratt
The Barratt and Dalton scheme, was also promoted by Julian Hanson – one of the main promoters of the £27m Ark pension scam in 2010/11. Hanson’s vigorous promotion efforts resulted in £5.5m worth of Ark victims (100 in total). One of Hanson’s co-scammers was the notorious Stephen Ward of Premier Pension Solutions who was the “architect” behind the Ark scheme – along with Andrew Isles of Isles and Storer Accountants. Hanson, Ward and Isles were never prosecuted and so went on to operate and promote millions of pounds’ worth of further pension scams – ruining many thousands more lives.
Ryan Playford
Sue Dalton, after moving on from the Barratt and Dalton scheme, went to work at Continental Wealth Management in Spain – reporting to head scammer Darren Kirby and his partner Jody Smart (who was the sole director of the company). Dalton’s extensive experience in pension scamming made her a hit at CWM. Ironically, Hanson has not been jailed along with Barratt and Dalton.
Playford got 15 years for supplying cocaine and canabis. Clearly a wrong-un, and someone who has no respect for the law or for the wellbeing of people’s lives who would inevitably be ruined by drug abuse.
But what does Playford’s drug conviction have to do with pension scams – you may ask? We have to go back a decade to discover the answer:
In 2008, Playford and an associate – Natasha Beesley – registered a drug company inCyprus:R. P. Med Plant. Presumably, the authorities were convinced that by “drugs”, this meant legitimate drugs for medicinal purposes.
Stephen Ward
In 2012, however, the pension scammers pounced on this Cyprus company as being the ideal sponsoring employer for another one of Stephen Ward’s pension scams: Capita Oak. Ward and his pension-lawyer friend Alan Fowler, used R. P. Med Plant Limited (Cyprus) as the so-called employer for an occupational scheme – registered by HMRC and the Pensions Regulator.
Ward and Fowler forged signatures on a trust deed for their new pension scam, and slightly changed the name of the employer to R. P. Medplant Limited (so that nobody could find it easily on the Cyprus Companies House register). It seems likely that Ward and Fowler must have known Ryan Playford somehow, in order to be able to get their hands on his drug company.
Patrick McCreesh
Capita Oak then became the vehicle for the scamming of 300 victims into investing their entire pensions in Store First store pods. Ward took charge of all the victims’ pension transfers, while another group of scammers took care of the cold calling of thousands of potential victims and signing up of the actual 300 victims.
Capita Oak’s 300 members were not the only victims invested in Store First store pods. There were thousands more in the Henley Retirement Benefits Scheme and various SIPPS including Carey (now Options and owned by STM), as well as Berkeley Burke and Rowanmoor. There have so far been no convictions – other than Playford’s for drug dealing.
This interconnected web of lies and deceit will keep on spreading unless these criminals actually fear the consequences of their actions. Let’s keep the convictions coming and not just save them for drug lords.
Every offshore pension scam starts with a “financial advisor”. Or, at least, a slick salesman posing as a financial adviser. This person can also call himself a “wealth consultant” or “senior associate”.
After the scammer pretending to be an adviser, the next player is the life office. More accurately described as a “death” office, this type of insurance company pollutes and corrupts financial services by ensuring three things:
Few so-called “financial advisers” offshore are truly independent. They are tied to – and dependent on – the life offices for fat, abusive and undeserved commissions.
There is virtually no such thing offshore as providing proper qualified advice – only selling products for commission. Products recommended to the victim are chosen because they pay the most commissions – rather than because they are in the investor’s interests.
The victim will be placed into a “death bond” – also known as a life bond, offshore bond, portfolio bond, insurance bond or wrapper. This toxic, high-risk, expensive and unnecessary product serves only one purpose: to pay a hidden commission to the so-called adviser.
Death bond providers (also known as “life” offices) have facilitated vast amounts of fraud for well over a decade. This has resulted in the destruction of hundreds of millions of pounds’ worth of pensions and life savings across Europe, the Middle East, South East Asia and beyond.
With the recent merging of RL360 and FPI, as well as Utmost and Quilter, this trend is set to increase.
The only way to protect consumers from being defrauded in the next decade is to educate them. The next raft of potential victims needs to be warned, informed, educated and prepared – so they too don’t fall victim to the death offices and their associates.
Here we recreate a typical exchange between a potential victim and a salesman posing as an adviser. Watch and learn; read and weep. This is what has already happened to thousands of expats. Don’t be the next victim conned by a fraudster and a death office.
Introducing Darren Blacklee-Smith of High Assets Wealth and John Carson – a builder who moved to sunny Spain to retire early.
Darren: Nice to meet you John. So, you want to move your frozen pension out of the UK as you now live in Spain?
John: Yes, I’ve been in Spain a few years now, with Brexit and everything, I’m not sure I should leave my pension where it is.
Darren: Very wise to look at your options. Your pension would probably be better off in a QROPS because it would be looked after better, would be cheaper to manage, you’d pay less tax, and you wouldn’t risk losing half of it when you die. Best of all, you’d get to choose your own pension investments!
DING!This is the first warning sign. The old “you’d pay less tax” trick… normally it’s the hook, line and sinker for this type of scam. Who doesn’t want to pay less tax after a lifetime of it? However, the so-called “lower tax charges” are nothing compared to the hidden commissions on the death bond and the toxic investments.
John: That all sounds like it would be better for me in the long run – and cheaper. So where would I move my pension to?
Darren: We’d recommend a QROPS in Malta as this is one of the best countries to move your pension to. It is a safe place for your pension to be looked after properly.
DING DING!! Malta was a prolific harbour for pension scams for a decade. It was a grey area, making it easy for scammers to make as much money as possible. The Malta regulator has tried to tighten up the regulations to prevent further scams, but the scammers always find a new loophole.
John: So how much would all this cost me?
Darren: My firm would charge you a small fee for setting up the transfer and then looking after your pension investments moving forwards.
DING DING DING!!! Oh how he makes it sound so simple! The fees that these advisors take are hefty. And they are not the only charges that will contribute to the destruction of the pension – because of the hidden commissions.
John: Sorry to ask this question, but how is your firm qualified or licensed, or whatever, to look after my pension investments?
Darren: Very important question to ask John – and I am more than happy to give you all the information you need to be comfortable that we are fully licensed.
DING DING DING DING!!!!You can look up any company or person’s license to verify if they’re actually registered or not. But most consumers don’t know how to do this.
John: Oh, I’m glad about that – I didn’t want to offend you, but you do hear stories don’t you…..
Darren: Absolutely. Now, we’re fully regulated and I’m fully qualified. It’s all on our website and here’s my business card and you can see all my qualifications.
John: I’m glad about that. I worked for thirty years to build up that pension and I don’t want anything to happen to it. The wife and I moved to Spain to have a comfortable retirement, and I need to make sure I’m making the right decision.
Darren: Absolutely. Definitely. So, let’s look at all the ways you can improve your pension and make sure its protected. The first question to ask is whether you want tax efficiency? You don’t want to pay too much tax do you?
John: I’ve paid tax all my life, so I feel I’ve paid my dues. I definitely don’t want to pay too much once I’m retired because every penny is going to count.
Darren: Well, that’s why we often recommend our clients should use a tax-efficient insurance bond, like Quilter. This is one of the World’s biggest insurance companies and this will not only protect your pension, but will also make sure you don’t pay too much tax.
DING DING DING DING DING!!!!! And this is the most dangerous part. Quilter will almost certainly be the death of your pension. A bond is not suitable for a pension. It is way too expensive and inflexible. And provides no tax advantages within a pension for someone living offshore.
John: That sounds great. So how do we go about this? How do we get the ball rolling, and what do you need me to do?
Darren: Right, I’ve got some forms for you to sign……we’ll need to get your pension transferred over to Malta, and then open up the insurance bond. And then we can start investing your pension and making it grow – so you’ll be able to have a happy and healthy retirement.
Darren: So, this is the transfer application, sign here…..
John: Ooh, not sure if I’ve got a pen…..
Darren: Don’t worry, I’ve got plenty!
This will complete the first stage in the pension scam process. It is a condensed version, as it can take weeks or months of email/phone exchanges. But the result is usually the same: Loss and destruction of the pension.
The scammer posing as an adviser hasn’t explained or revealed the charges and commissions. And he hasn’t told the victim how inflexible the bond is or how it provides no protection or tax savings in reality. And now the scammer has a signed, blank dealing instruction so he can proceed to invest the victim’s pension in high-risk, high-commission investments provided by the death office.
The world of pension and investment scams is dominated and driven by commissions on investments (usually unregulated). The scammers’ strategy is always identical: get the pensions away from the safety of a reputable pension provider and into the hands of a SIPP, a SSAS or a QROPS. One purported benefit of these types of schemes is that the member has control over where the funds are invested. This means that the scammers have control over where the funds are invested. These types of schemes are open to abuse by unscrupulous commission hunters whose only mission is to fill their own pockets – at the expense of the victim. Once transferred, the victims’ retirement funds are controlled by the scammers and invested in unsuitable, unregulated investments which pay fat introduction commissions.
It could be argued, however, that not all the investments are necessarily bad. There are some basic rules for pension investments – so let’s take a look at the different types and how they could (or should) fit into a pension portfolio.
Funds. Funds come in all shapes, sizes, flavours and types. As long as the funds are regulated, have a good track record, are appropriate to the risk profile of the individual investor and are competently managed by qualified investment professionals, they can be appropriate for a pension. However, pension scheme members must not be locked into any funds, and the charges must be transparent and affordable. There must not be any hidden commissions, and any one fund should form part of a diverse portfolio.
Bonds. Bonds are term loans with supposed “guaranteed” returns or interest. They are not regulated investment products, so there is no guarantee or protection in the event that they fail (as they often do). Typically, they are sold to victims as being “asset backed” and with unrealistically high returns or interest. They also typically pay high commissions to the scammers who promote them. These should be avoided at all costs as they are entirely unsuitable, risky and illiquid for retail investors – and so many of them are out and out scams.
Structured Notes. These are “derivatives” and are very complex instruments which are only suitable for sophisticated or professional investors. They also pay hefty commissions to the scammers who use them indiscriminately to “churn” their victims’ funds. Churning means investing the same sum of money multiple times in different structured notes to generate the maximum amount of (hidden) commissions. An experienced and sophisticated investor might want to consider having a small part of a pension portfolio invested in structured notes – as long as the commission taken by the “adviser” is low enough (or preferably non-existent).
Property. Residential property cannot form part of a pension’s underlying assets. However, commercial or agricultural land or property is acceptable. The main problem with property, however, is that it is illiquid – so it should only be used with extreme caution as part of a diverse portfolio of well-spread assets. Property also typically attracts high commissions and can frequently be used and abused by scammers. Store pods and car parking spaces fall into this category, along with holiday accommodation, forestry and industrial units.
The key to building a sensible and appropriate portfolio of assets for a pension is to ensure that only a licensed and qualified adviser is used to recommend the investments. Such professionals should only be charging for advice – and should not be earning commission on the investment products which are sold. If an adviser is receiving commission from the investment provider, then he cannot be independent – and should not be giving advice at all.
The key to making sure that the whole pension investment package is in the interests of the investor – rather than purely in the interests of someone posing (often fraudulently) as an adviser – is to look at each stage in the process.
What I mean by the “package” is this:
A. The transfer out of the existing pension scheme should be in the interests of the investor
B. The transfer in to the new pension scheme should be in the interests of the investor
C. The investment of the pension fund should be in the interests of the investor – and not just the adviser (or introducer)
D. There must be no offers of “loans” or “cashback”
The timeline of the past eleven years is littered with sordid and tragic examples of the whole “package” being nothing but a scam. But often this is true even when one of the component parts is legitimate or even harmless. It is the combination of all the elements which can, together, produce a fatal result: loss (to the investor).
In the UK, every pension scheme member has a statutory right to a transfer from one HMRC-registered scheme to another HMRC-registered scheme. However, this can often be a terrible move if it results in the investment of the money falling under the control of a commission-hungry scammer who has no regard for the interests of the victim.
The most risky part of any pension transfer “package” is always the investment. Here are some examples:
Bogus occupational scheme set up by a squad of known, serial scammers with a mythical sponsoring employer (in Cyprus). Promoted and distributed by boiler-room cold callers and “introducers”. 300 victims’ pensions transferred into the Capita Oak scheme, and all £10 million of their funds invested in Store First. The scammers behind the scheme earned up to 46% in commission. The scheme was placed in the hands of Dalriada by the Pension Regulator. Dalriada reported that the investments were worthless and Store First was placed into liquidation in 2019.
Hundreds of victims’ pensions were transferred to the Carey SIPP scheme purely so their funds could be invested in Store First. With the same result as in the Capita Oak scam, victims found that the “guaranteed” returns of 16% did not materialise. This was because the 16% had been paid “accidentally” to the scammers. One such victim – Russell Adams – took his case to the High Court and lost. But the judgement was overturned in the Court of Appeal and Carey must now reinstate his original pension. Other SIPP providers involved were Berkeley Burke, Montpelier (Curtis Banks) and Lifetime (Hartley).
Another bogus occupational scheme – run by the notorious Stephen Ward. 100 victims were scammed out of their pensions for the sole purpose of investing their funds in high-commission, unregulated funds and bonds. Investments included Quantum PYX – a forex trading fund; Dolphin Trust – now in liquidation; Park First Glasgow; Colonial Capital Loan Notes; The Resort Group holiday flats in Cape Verde and The Reforestation Group in Brazil. The scheme was placed in the hands of Dalriada by the Pension Regulator. Dalriada reports that most of the investments are worthless.
A group of known unlicensed scammers – including Square Mile in the Czech Republic – advised hundreds of UK residents to transfer their pensions to this Hong Kong scheme. All the victims had their pensions invested in worthless, high-commission, unregulated funds and bonds such as Blackmore Global, Swan, GRRE, Granite and Christianson Property Capital. The scheme is now being re-registered by the Hong Kong regulator – and the funds are deemed to be worthless.
Unlicensed CWM, based on the Costa Blanca in Spain, defrauded 1,000 British expats out of £100 million worth of pensions and life savings. Victims had their funds invested in high-risk (and high-commission) structured notes which were only suitable for professional investors. The clients’ signatures were forged on the investment dealing instructions. Most of the structured notes suffered catastrophic losses, and what little remained of the victims’ funds were further eroded by the high fees on the illegally-sold insurance bonds provided by Quilter, Utmost and SEB. The CWM crew – along with Stephen Ward of Premier Pension Solutions (who signed off all the pension transfers) – are now facing criminal charges of fraud and forgery in Spain.
A pension scheme is a bit like a store pod. It is a container – no different to a cardboard box or shopping trolley. By itself, the scheme (or the pod) is harmless. The harmful ingredient is the greedy, unlicensed introducer or “adviser”. Fill a shopping trolley with unhealthy foods, alcohol and cigarettes and you have a recipe for an untimely death. Fill a store pod with flammable chemicals, and you risk an explosion. Fill a pension scheme with high-risk, high-commission, toxic investments, and you have the perfect recipe for poverty in retirement.
The Spanish criminal trial of so-called “financial advisers” in Denia has exposed the widespread fraud routinely committed in offshore financial services for over a decade.
This particular stage of this particular trial may be directed at just eight members of Continental Wealth Management and Premier Pension Solutions. For now. But the case – brought by Pension Life – needs to be extended to all parties who have committed similar offences in offshore financial services.
Spain is the second-largest expat jurisdiction in the world – after Australia. More than three quarters of a million British expats have settled in the Spanish sunshine. That’s over half the total in the whole of Australia. And these Spanish-resident expats are sitting targets for pension scammers.
It is not unusual for Brits to be suspicious of foreigners in any country. Expats typically veer towards their own countrymen. They are notorious for being suspicious of foreign food and customs. Hence, the depressing fact that it is British scammers who relieve British victims of their pensions and life savings.
And this is why so many British expats – especially in Spain – fall prey to bogus “financial advisers” flogging bogus life assurance policies provided by bogus insurance companies – like Quilter International headed up by Peter Kenny.
The facts of this criminal case are indisputable. One thousand victims were scammed by Continental Wealth Management. Between 2009 and 2017, these victims lost many millions of pounds’ worth of pensions and life savings. And much of this was facilitated by Quilter International (formerly Old Mutual International).
So how were these losses caused? What on earth went wrong? Financial services – in any country – should be a safe industry which investors can rely on. Depend on. Why have so many expats – not just the Continental Wealth Management victims – lost so much money?
Who and what is to blame for the loss of hundreds of millions of pounds?
The short version of the answer is: “COMMISSIONS”. Offshore advisers get rich by selling products for commissions. What they don’t sell is independent financial advice. Proper independent advice (provided by a correctly and properly qualified and licensed adviser) is about recommending an appropriate investment strategy which is in the best interests of the client. And, of course, charging a reasonable and commercially-viable fee for such advice.
But that rarely – if ever – happens in offshore, expat jurisdictions. What is cleverly presented as “advice” is generally just a dishonest ploy to sell a client unsuitable products which they don’t need and that will make the salesman the most commission.
The orchestrators, facilitators and architects of all this fraud are the “life offices”. In practice and in reality, these companies are more about death than life. Their business is about destroying life savings and pensions – while enriching the pockets of fraudsters.
There are various ways to combat this widespread fraud facilitated by the life offices:
Bring criminal proceedings against ALL those who have defrauded their clients – from bogus, unlicensed advisory firms to the life offices themselves
Ensure all so-called advisory firms (sometimes calling themselves “wealth managers”) are correctly licensed in the jurisdiction where they provide advice
Make it mandatory for all advisers to be properly qualified to provide financial advice
Ban all firms without an investment license from providing investment advice
Educate consumers to only use advisory firms which openly disclose their professional indemnity insurance on their website
The bald truth is that if the life offices – such as Quilter International, Friends Provident International and RL360 – were closed down, this widespread fraud would stop.
The only way this fraud keeps going so vigorously and relentlessly, is the terms of business given by the life offices to the scammers. And, of course, the fat commissions the life offices pay to them. As well as the toxic, risky, high-commission-paying investments the life offices put on their “platforms” for the scammers to use (and abuse).
You only have to look at Continental Wealth Management to see how quickly a scamming firm will collapse once life offices withdraw terms of business. The life offices are the life blood of scams and scammers.
Without the facilitation of the “death” offices (Quilter International, Generali, SEB etc.) frauds such as Continental Wealth Management could not have taken place. The blood of all those who have died wretched, lonely deaths – and those who are suicidal – is squarely on the hands of Peter Kenny and his various cronies.
The bank statements of Continental Wealth Management show the repeated amounts of fat commissions paid by Quilter International, Generali and SEB. And these amounts were paid willingly and cheerfully in the full knowledge that every payment meant more lives damaged; more funds destroyed; more miserable deaths.
Quilter and their associates had reported on the victims’ losses for a decade; produced valuations and transaction histories evidencing the repeated, relentless fraud. And yet Quilter (and the other death offices) did nothing – just kept on and on facilitating the same fraud: repeat, repeat, repeat.
While the “advisers” from Continental Wealth Management and Premier Pension Solutions stand trial – the hundreds of victims have to listen to the defendants’ offensive denials and excuses. But, worst of all, the distressed and impoverished victims know that the life (death) offices should also be on trial – standing shoulder to shoulder with the scammers themselves.
The cause of the investment losses in the Continental Wealth Management case was almost exclusively toxic, high-risk (and high-commission) structured notes. These are complex investment instruments called “derivatives” and should only ever be used for professional or sophisticated investors. They are certainly completely unsuitable for ordinary people (who are classed as retail investors) or for pension schemes.
High-risk structured notes are big business for the death offices. Quilter International (formerly Old Mutual International) has historically onboarded over 100 new structured products per month. In the case of the Continental Wealth Management fraud, it was the structured notes – from Leonteq, Commerzbank, Royal Bank of Canada and Nomura – which caused the terrible investment losses. These toxic, high-commission investment products – so beloved by the scammers because of the high commissions – were responsible for the destruction of millions of pounds’ worth of pensions and life savings.
Quilter International knew perfectly well that these toxic products – totally unsuitable for retail investors – paid 8% commission to the scammers and a further 8% to 10% to the “arrangers”. They knew perfectly well – and admitted internally to their “asset review committee” – that these products were risky and “not good value”. But they still allowed the scammers (to whom they gave terms of business) to keep selling them.
Quilter has also admitted that they had 2,047 structured products in total, and that the average holding per product was £243,654.03; that the smallest holding was £67.54 and the largest holding was £5,350,833.60. Quilter was concerned that there was a reputational risk to Quilter for allowing these structured products to be held within their offshore bonds. They also acknowledged that these products carried excessive commissions and were causing “suboptimal customer outcomes”. However, their concern for their own “reputational risk” did not extend to concern for their victims.
Quilter has tried to wriggle out of culpability for the victims’ losses by claiming that investment product “suitability” is the responsibility of advisers. And that these so-called advisers are participating in a “race to the bottom”.
However, the advisers are mostly scammers to whom Quilter has cheerfully given terms of business. And they are winning the race to the bottom by several lengths. If Quilter withdrew terms of business from all the scammers, the race wouldn’t even take place at all. In fact, all Quilter would have to do would be to ensure that all advisers are qualified and licensed – and that investors’ risk profiles are correctly respected – and the fraud would stop instantly.
But until Quilter and all the other death offices are put on trial for fraud themselves, this crime is going to continue. And victims are going to keep losing their pensions and life savings – and dying in abject poverty.
As an interesting post script, Quilter have posted a warning about scams on the internet. Their disingenuous claim that “Your security is our priority, so we have reacted quickly to help you and the financial advisers we work with to spot fraudsters” is ironic and cynical. Quilter themselves routinely work with fraudsters who pose as financial advisers – and who have no license or qualifications to provide financial advice.
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:
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.
Life offices who caused the death of victims and their life savings/pensions, will now face proceedings in the Spanish civil courts. Pension Life’s proceedings against the defendants are due to be launched before Christmas 2020. The defendants will be Quilter International (Ireland), SEB and Generali (which has changed its name to Utmost Wealth).
In the past ten years or so, the life offices – Quilter, SEB and Generali (shamefully promoted by International Adviser) – have freely given terms of business to unlicensed, unqualified, unscupulous “chiringuitos financieros”. These scammers – some with no license at all, and some with only a restricted insurance license – have put thousands of victims into pointless, expensive insurance bonds. The scammers’ sole motivation for the use of these insurance products is the commission paid by the providers: somewhere between 5% and 8% (depending on the term of the bond).
A bond is merely a “wrapper” (or container) and serves no purpose – other than a purported possible tax “efficiency” loophole. However, the so-called tax advantages are dubious at best outside the UK – and non-existent within a pension. In reality, any tax saved would be far outweighed by the high cost of the insurance bond.
The real problem with these insurance bonds has been the high-risk investments offered by the bond providers on their “platforms”. Many of the investments are highly toxic, only suitable for professional or sophisticated (or reckless) investors, and are chosen purely for the commissions they pay to the scammers.
Chiringuitos – such as the notorious Spanish firm Continental Wealth Management (which collapsed in 2017) – love insurance bonds; esoteric, unregulated investment funds; and structured notes. This passion comes not from any benefit provided to the victims, but from the huge commissions they (the scammers) can earn if their high-pressure sales techniques are effective.
One group of scammers – including Stephen Ward of Premier Pension Solutions, Paul Clarke of AES International (now Roebuck Wealth), Darren Kirby and Jody Bell/Smart/Kirby/Pearson of Continental Wealth Management – is currently facing fraud charges in the Denia criminal court.
The fraud behind the insurance bond scams is, of course, facilitated and encouraged by the insurance companies themselves. One group of victims – who have lost hundreds of millions in risky, unsuitable investments such as LM, Axiom and Premier New Earth – has already issued proceedings in the Isle of Man civil court. Pension Life is preparing to issue another for the losses caused by other toxic funds and structured notes – also in the Isle of Man civil court.
Many of the culpable life offices base themselves on the tiny, dreary Isle of Man. It is a well-known tax haven for companies and individuals who are not prepared to pay their fair share of tax – and it also routinely harbours scams and scammers (due to limp regulation and ineffective governance). The failures of the IoM’s legal system – as part neither of the UK nor Europe – are well known and heavily exploited by institutions with nefarious intentions. Known, serial scammers such as Phillip Nunn and Patrick McCreesh of Blackmore Group based their Blackmore Bond (promoted by Surge Group – which also promoted the collapsed London Capital & Finance “mini bond”) and their Blackmore Global fund there.
In Spain, virtually every insurance bond ever provided has been sold to the victims illegally (in contravention of the Spanish insurance regulations). Few victims are ever made aware of the serious drawbacks of these products:
inflexibility of the fixed terms of up to ten years
annual fees are based on the original premium (amount invested) – which means that when investment losses occur, the fees have an ever-increasing damaging effect on the remaining funds
bond providers will accept investment instructions from unqualified, unlicensed, known scammers
obviously low-risk, retail investors (such as those in a pension) will be invested in high-risk funds
when losses start to appear, the bond providers do nothing to challenge the reckless, irresponsible conduct of the scammers with whom they have terms of business
some victims, whose entire portfolio has been wiped out by the investment fraud facilitated by the bond providers, continue to be charged annual bond fees
victims’ signatures on investment dealing instructions are frequently forged or copied
The Isle of Scam courts will be watched with intense interest by thousands of Quilter, FPI and RL360 victims (whose life savings have been wiped out) over the coming year. But, meanwhile, the Spanish courts will get to hear the cases against providers based in Ireland. All victims of Continental Wealth Management have been asked to obtain their documents for the litigation from Trafalgar International. Any who have not received an email from Pension Life can contact Trafalgar’s Tony Barnett direct on:
The letter of authority which needs to be sent to Mr. Barnett in order to participate in the Spanish civil proceedings against Quilter International, SEB and Generali (Utmost Wealth) is as follows (victims can copy and paste this text into a document if necessary):
URGENT Letter of authority to Antony Barnett of Trafalgar International GmbH
Mainzer Landstrasse 49, 60329 Frankfurt am Main Germany
Dear Mr. Barnett
Letter of Authority to provide documents relating to pension, insurance bond and investments/losses
Please accept this as my letter of authority for you to discuss, communicate and deal with Angela Brooks of Pension Life who is acting as my Representative on the subject of my affairs in respect of my pension, investments and losses arising as a result of Continental Wealth Management S.L./Continental Wealth Trust S.L.
Please provide the below copy documentation/information to Angela Brooks by return. These documents are required immediately for litigation in the Spanish Civil Court due to be issued next month. I intend to be a claimant in these proceedings against the life offices Quilter International Ireland, SEB and Generali (Utmost).
Pension transfer advice (Premier Pension Solutions or Global Financial Options)
Client contract, agreement and confirmation with CWM and Inter Alliance (For when CWM was with Inter Alliance)
Client contract, agreement and confirmation with CWM and Trafalgar (For when CWM was with Trafalgar International)
Fact find and risk profile
Insurance bond fees schedule
Insurance bond advisor transfer letter (from Inter Alliance to Trafalgar)
Insurance bond application
Insurance policy document
Latest valuation statement
Latest full transaction history from inception to date (or point of redemption)
Latest estimated bond surrender value
Copies of all investment dealing instructions since inception
Closing insurance bond statement (where bond has been surrendered)
Closing pension statement showing all charges and amount remitted (where pension has been redeemed)
Confirmation and full details as to how CWM’s insurance mediation/investment advice was licensed
Details of all fees and commissions charged by CWM, Inter Alliance, Globalnet and Trafalgar
Any correspondence relating to queries or complaints
Trafalgar’s professional indemnity insurance policy and schedule
In the case of a Quilter bond, confirmation as to whether it is Isle of Man or Ireland
RL360’s acquisition of Friends Provident International may be set to ruin even more investors internationally. It will certainly increase competition with Quilter (or Skandia, or Ann Summers or whatever OMI are calling themselves this season).
The biggest question – and one which International Adviser’s Kirsten Hastings forgot to ask RL360 David Kneeshaw when she interviewed him on 16.7.2020 – is:
Why on earth RL360 wanted to buy a company which is being sued for £millions after thousands of FPI victims lost their life savings in a high-risk fund mis-selling scandal?
During the International Adviser 12-minute video, Kirsten never brought the subject up once. Forgetfulness? Deliberately avoiding the issue? FPI is being sued alongside Quilter – main sponsor of International Adviser.
Kneeshaw seemed like an amiable fellow in the interview as he proudly announced that “all good things come to those who wait” (a sentiment with which thousands of death bond investors would strongly disagree). Kneesup also proclaimed that he is glad to be able to integrate the businesses and that the marriage has produced a “good, strong, stable company”.
But the question hung in the air like a fart in an elevator: what about the £100m+ worth of high-risk funds which were “entirely inappropriate for unsophisticated investors” (International Adviser’s words – not mine). And why didn’t Kirsten mention it? And why didn’t Kneesup explain what provision he has made to compensate thousands of FPI’s victims?
Kneesup confirmed that RL360 paid £259 million for FPI (£209 million in cash and £50 million in deferred cash). So has he kept back another hundred million or so to settle FPI’s liabilities to its victims who have lost their life savings?
Victims staring financial ruin in the face will want to know why RL360 didn’t just pay – say – £159 million for FPI and keep back £100 million for the victims. Or perhaps the £50 million in “deferred cash” is being put aside for that?
Or maybe, FPI should have paid RL360 to take the company away and sort out the toxic and destructive mess which has ruined thousands of policy holders.
Kneesup went on to proclaim that the future of FPI “is secure and can carry on as normal”. Well, I bloody well hope not! “Normal” has been an absolute disaster which has resulted in a catastrophe of epic proportions. FPI was giving terms of business to hordes of unlicensed, unscrupulous, unqualified “advisers” (in reality, just bond salesmen).
These “Chiringuitos” (as the Spanish regulator refers to them in their warning about financial scams) have destroyed £ millions in their relentless quest for commission.
The deeply iniquitous practices – so enthusiastically facilitated by life offices – included charging victims fees, plus an 8% commission on the (entirely unnecessary) insurance bonds, plus further commissions on the toxic investments offered by the life offices.
However, I really do like to give people the benefit of the doubt. Assuming that Kneesup does have at least a few honourable intentions, here are some friendly suggestions as to how the RL360/FPI marriage could help clean up this toxic “death bond” industry:
Don’t deal with advisory firms which don’t have a license
Don’t deal with advisory firms which don’t have an investment license
Don’t deal with advisory firms whose “advisers” aren’t qualified
Don’t deal with advisory firms who have a history of investing their victims’ life savings and pensions in toxic crap (high-risk, professional-investor-only funds and structured notes)
Don’t pay commissions – if the insurance bonds are any good, and the clients genuinely need them, the products will sell themselves
Don’t tie investors in for fixed terms – give them the flexibility to get out whenever they want or need to
Don’t offer investments – the industry has shown it is incapable of performing asset reviews and weeding out toxic rubbish
Keep the fees in proportion to the fund value – allow flexibility/drawdown without unnecessary “drag” on the funds
Only allow advisers to sell insurance bonds when they are actually needed (which is hardly ever)
But the biggest friendly suggestion of all to the amiable Mr. Kneesup with the fringe on top is:
Address the elephant in the room: pay compensation to the thousands of FPI and RL360 victims who have lost their life savings and are facing financial ruin.
In his euphoria at the completion of the acquisition of FPI, Kneesup must remember that the insurance bond is the World’s biggest cause of offshore financial crime. Insurance bonds have been ruled by the Spanish Supreme Court as being invalid for the purpose of holding investments. Virtually all insurance bonds ever sold in Spain have been done so illegally – it is a criminal offence to sell insurance bonds outside the precise stipulations of the Spanish insurance regulations in Spain.
I really hope that the elephant in the room will be dealt with. David Kneeshaw has a golden opportunity to help reform the offshore financial services industry. He can emerge from the appalling news of this marriage made in hell as a hero in shining armour – or just another sordid perpetrator of scams and financial crime. He can put Quilter’s Peter Kenny to shame, or become just as bad as him. The World will be watching. Let us hope Kneeshaw chooses wisely – and becomes “Kneesup” rather than “Kneesdown”.
Today, 7th April 2020, was supposed to have been the second part of the Continental Wealth Management criminal trial. Obviously, due to Coronavirus, the hearing has been postponed. For now. As soon as the pandemic is under control and life in the courts (and elsewhere) gets back to “normal”, the hearings will be rescheduled. This is obviously a disappointment to the victims who are waiting anxiously to see the outcome of the trial – but it is only a relatively minor setback in the grand scheme of things. We will get these defendants into court, and the judge will give directions as to how to deal with the crimes committed.
The crimes involved are:
Fraud
Disloyal administration
Falsification of commercial documentation
The second batch of defendants comprises:
Stephen Ward of Premier Pension Solutions and Premier Pension Transfers, IPTS (International Pension Transfer Specialists), AES International, Dorrixo Alliance and Marazion
Paul Clarke of Continental Wealth Management, AES International and Roebuck Wealth
Jody Smart (alias Jody Bell) of Continental Wealth Trust, Jody Bell Fashion, Grant A Wish charity and Mercurio Conpro
Darren Kirby (partner of Jody Bell) of Continental Wealth Management and Continental Wealth Trust
The first batch of defendants were cross examined in the week of 24th February 2020 and comprised:
Patrick Kirby (brother of Darren Kirby)
Anthony Downs
Dean Stogsdill
Neil Hathaway (all of Continental Wealth Management)
When we first set out this case, we weren’t entirely sure the court would accept the charge of fraud – because it is difficult to prove as a complainant needs to establish intent. However, the court had no hesitation in accepting this charge, as well as the additional charges of disloyal administration and falsification of commercial documentation.
The evidence in the case is very clear and incontrovertible: seventeen lead complainants (out of more than 600) who all exhibit the exact same “symptoms”:
Low to medium risk investors placed in inappropriate, high-risk investments
Insurance bonds sold illegally
Investments churned repeatedly
No license to provide insurance or investment advice
No qualifications to provide financial advice
No adjustment to financial strategy when serious losses began to appear
It is tempting to think that perhaps Continental Wealth Management (which later became Continental Wealth Trust but still kept the original name) was an isolated case. But, sadly, that is not so. I have seen many examples (in Spain and other jurisdictions) of clients being placed into inappropriate investments, by other so-called advisers, which paid large, hidden commissions over the past six years. Stephen Ward was routinely flogging the EEA Life Settlements fund – putting some investors’ entire portfolios into this risky fund which paid up to 19% in commission. He was also flogging other high-risk funds such as Traded Life Policies, Axiom, Blackrock Gold and Aria – as well as selling bonds such as Skandia (OMI) illegally. And, naturally, Ward’s clients suffered crippling losses.
The above method, show-cased by Stephen Ward, has – of course – been rife in offshore financial services for years. It has made the advisers rich and the investors poor. In short, this is disloyalty at its worst: the adviser putting his own interests above those of his clients.
And that, in Spain and other European countries, is a criminal offence.
But Ward wasn’t alone: Paul Clarke did the same even after he left Continental Wealth Management and became an agent of AES International – exploiting the financial advisory market on the Costa Blanca as he decimated clients’ savings with more illegally-sold insurance bonds, structured notes and expensive, high-commission funds. Clarke regularly featured in whole-page spreads in Euro Weekly – spouting “expertise” and masquerading as a qualified, experienced financial adviser.
There are few firms in Spain – or indeed the rest of Europe and beyond – which do not rely heavily on the notorious insurance bond. The offshore market is dominated by the usual suspects: OMI (previously Skandia and now Quilter); Generali, SEB, RL360 and Investors Trust. And all these insurance companies encourage unregulated, unqualified advisors to sell these bonds illegally. There are few, if any, benefits to the consumer – and no insurance bond should ever be used inside a QROPS (unless there’s no lock-in and no commission).
I just Googled: “wealth management and financial advice Spain”. The top results came up as: Blacktower; Blevins Franks; Abbey Wealth; Masttro (a firm I’d never heard of before); Finance Spain (another firm I’d never heard of); Spectrum IFA Group; and Alexander Peter. I am not saying whether any of these firms are either good or bad – but I think it is safe to assume they are all selling insurance bonds illegally.
Of course, there’s nothing inherently wrong with an insurance bond. It is, after all, just a wrapper – or container for funds and investments. There are, arguably, some tax advantages in some jurisdictions – although they should never be used inside a QROPS.
The problem with an insurance bond – whether from OMI, SEB, Generali or RL360 – is that an investor is going to get one whether he wants or needs one or can afford one or not. The investor will get locked in for up to ten years and he won’t be aware that the adviser will get paid an 8% commission for selling the bond. This commission will get clawed back by the life office over the term of the bond.
Many investors are conned into believing that the bond provides some sort of protection. It doesn’t. Many investors are also conned into to thinking that the investments offered by the bond providers are “safe”. They aren’t necessarily – there may be some decent investments but there are also an awful lot of rubbish, expensive ones. But the biggest con of all is that the investor isn’t told that the annual bond charges (taken quarterly) will stay the same even if the portfolio value decreases. So, if the investor needs to withdraw some money from the bond, the charges will start to do some serious damage to the remaining fund. And if the investments fail – as many structured notes invariably do – and the portfolio value starts to decrease alarmingly – the bond charges will then erode what’s left very rapidly.
Some victims of serious mis-selling actually end up having the entire fund destroyed by irresponsible, fraudulent or disloyal investment advice by rogue advisers – and can still be paying the bond charges even after the entire portfolio has been destroyed.
The other half of the disloyalty and fraud by Continental Wealth Management (as well as some of the other well-known names in “wealth management”) is the practice of “churning”. This means that the same chunk of money is invested repeatedly to generate as much commission as possible – in as short a space of time as possible. This is easy to spot when looking at the bond statements (whether OMI/Quilter or RL360 or whatever):
“Buy £100k worth of rubbish (earn 6% commission); sell £100k worth of rubbish; buy another £100k worth of rubbish (earn another 6% commission); sell £100k worth of rubbish; buy”….and so on. This exercise can be repeated over and over again in any period – say one year – to mince two or three lots of commission out of the same sum of money. The investor may not notice – as long as his fund value isn’t falling too much – and, because the commissions are concealed, he may not realise he is being defrauded and that his adviser is committing a criminal offence by being “disloyal”.
The Continental Wealth Management case – being heard in the criminal court in Denia, Alicante – may not cure the ills of the offshore financial services industry overnight. But it will certainly send out a clear message to all financial advice firms that Spain, at least, will not tolerate such conduct. While British regulators, courts and police authorities are happy to leave fraudsters and scammers free to keep on operating and promoting financial scams, Spain is in the process of sending out a very clear message:
The protagonists behind collapsed Spanish advisory firm CWM – Continental Wealth Management – will be on trial week commencing 24th February in the Denia Criminal Court of First Instruction.
This criminal matter will have enormous ramifications for similarly-affected victims, and for any advisory firms which have engaged in any of the same practices used by CWM. These illegal practices include the gratuitous selling of insurance bonds from bond providers such as OMI, SEB, RL360, Friends Provident and Generali; putting low-risk investors into commission-laden, high-risk investments; churning and concealment of backhanders; forged or copied client signatures on investment dealing instructions.
The routine “sale” of insurance bonds (whether the clients need them or not – which 99% of the time they don’t) is illegal in Spain. Undoubtedly this will be similar or identical in other jurisdictions. The Spanish Supreme Court has ruled that insurance bonds are invalid for the purpose of holding investments. But still the scammers continue to flog them indiscriminately – purely for the fat commissions.
Insurance bond salesmanship has become one of the biggest, most widespread and toxic crimes across all expat territories – and now it must be outlawed by the ethical sector of the financial services market. And there is an ethical sector which abhors the toxic and dishonest practices which will be the subject of the CWM trial. There is also a “semi-ethical” sector which is genuinely ashamed that it too has carried out such practices, but which is determined to clean up it’s act and “go straight” from now on.
Make no mistake – the Denia Criminal Court is determined to clean up this stretch of the Costa Blanca in particular and Spain in general – as well as make an example out of the CWM scammers. Some of the CWM victims, as well as Ark and Capita Oak victims – and those financially ruined by both Stephen Ward and Paul Clarke – will be at the court hearings the week of 24th February. There will be local and international press coverage to highlight the importance of this significant event.
The
defendants in the CWM case were served in early January. They are now
compelled to come to court to be cross-examined by our lawyer. Each defendant
will have his or her own legal representative and also a court-appointed
translator. The cross examinations will take place privately in front of
the judge, but a transcript of each one will be published subsequently. I will
translate these transcripts and make them publicly available on the Pension
Life website as soon as they are made available by the court.
The dates
of the now compulsory court hearings are:
Monday 24th February from 10
a.m.: Darren Kirby; Patrick Kirby and Anthony Downs
Tuesday 25th February from
10 a.m.: Jody Smart, Neil Hathaway and Dean Stogsdill
Friday 28th February from 10
a.m.: Stephen Ward and Paul Clarke
Darren
Kirby did not show up for the last criminal trial – when he was accused of
defrauding three victims out of their life savings in order to give him money
to prop up the rapidly failing CWM and to pay money to his partner – Jody Smart
– to invest in her fashion business: Jody Bell. One of the complainants in this
previous case has since died.
Stephen Ward of Premier Pension Solutions has fled to Florida where he owns a portfolio of at least ten mortgage-free properties near Disneyland. However, he will not succeed in avoiding prosecution.
Sole director and shareholder of CWM, Jody Smart did turn up for the last criminal trial, so it is expected that she will probably attend this one. Smart will be keen to deflect blame from herself and claim that she was only a “nominee” director. However, in the last two years of operation, she paid herself 991,035.86 Eur (on top of her already more than generous director’s salary) – 670,035 Eur into her property company Mercurio Conpro and 321,000 Eur into her Jody Bell fashion business.
The remaining CWM defendants: Anthony Downs, Neil Hathaway, Dean Stogsdill and Paul Clarke are likely to turn up since they are all based in Spain and have families, property and businesses here.
CWM earned 3,391,876 Eur in commissions on sales of insurance bonds and structured notes in the last two years of operation. Scammers like CWM generally made at least 16% commission out of victims’ pensions and investments. This would mean that in this period, CWM scammed victims out of approximately 17,000,000 Eur. On top of his, the firm earned many hundreds of thousands from victims they cleaned out promising them shares in the company (which Darren Kirby had claimed was worth 10 million), properties and cars. But when the firm closed, the CWM bank account was virtually empty. This video will illustrate some of the appalling misery the CWM victims endured – and the extent to which Jody Smart benefited from the money stolen from the victims: https://www.youtube.com/watch?v=lYlxu8YOaAM&t=3s
The
following related entities have been asked to provide documentary evidence to
support the complainants cases:
Inter Alliance, Globalnet, Trafalgar, Old Mutual International, SEB and Generali
This
evidence will include copies of risk profiles and investment dealing
instructions – bearing the forged investor signatures.
This
criminal case has been brought by using 17 “lead” cases – victims of
the CWM scam who have all lost considerable amounts of their life savings.
These victims are now the lead complainants who also represent the interests of
the further hundreds of victims who have suffered similar fates. The lead
complainants have put an enormous amount of time, work and self-sacrifice
towards this matter. Each complainant has had to re-live the horror of their
suffering at the hands of CWM – telling their painful stories to our lawyer
Antonio Bertomeu. Most of the lead complainants are based in the vicinity of
Denia – where CWM committed the majority of the crimes. However, one
complainant came all the way from Portugal.
I will be
with Antonio Bertomeu the week before the trial as we prepare for the cross
examination of the defendants in court during the week of 24th February.
This is a crucial point in the proceedings as there has been a substantial
amount of further evidence which has emerged since this complaint was
originally filed in court in June 2019. There are also further defendants
who will now need to be included in the proceedings.
The Denia
court has stressed that this is an issue which is of great importance as it
involves three serious criminal offences which are likely to involve
substantial financial penalties and custodial sentences:
Falsification of commercial documents
Disloyal administration
Continuous fraud
The outcome of this case will inevitably have far-reaching consequences for the industry globally – especially since the practices which are the subject of these criminal proceedings have been widely practised for a number of years. These crimes have not been exclusive to Continental Wealth Management and their associates. There are many victims beyond the clients of CWM who have suffered similar crippling investment losses. The scope of these criminal proceedings will now inevitably reach into other firms and jurisdictions.
Meghan and Harry – the Duke and Duchess of Sussex – are having a tough time (and are running away from home). Their sadness and confusion is because they have no purpose or passion in life. So I am offering them an interesting and satisfying challenge: taking on and championing the cause of pension scam victims. Harry’s Mum knew a thing or too about adopting worthy causes and had no problem jumping on a plane to far away, war-torn places full of the most appalling human suffering and landmines. Meghan and Harry don’t even have to travel as far as the airport to find victims whose cause desperately needs championing.
Poor Duke and Duchess of Sussex – what an awful time they’re having: posh clothes; flash cars; sumptuous “cottage” in Windsor Park. They needn’t be bored and aimless any longer. They can become patrons of the plight of the thousands of British citizens who have lost £ billions to pension and investment scams.
Just as the Late Princess Diana confronted the horrific dangers of land mines, Meghan and Harry can confront the huge tide of appalling human misery caused by scammers Stephen Ward of Premier Pension Solutions; Paul Clarke of Roebuck Wealth; Dennis Radford of Spectrum IFA Group; Darren Kirby of CWM; Gus Ferguson and David Vilka of Square Mile; XXXX XXXX of Nationwide Benefit Consultants; Phill Pennick of Pennick Blackwell; Peter and Sara Moat of Fast Pensions; Paul Baxendale-Walker; Patrick McCreesh and Phillip Nunn of Blackmore Group; Paul Careless of Surge Group.
This is now becoming a very high-profile topic – especially in the light of the multiple, dismal failings of the FCA and a recent series of hard-hitting articles published by Tom Kelly of the Daily Mail. Kelly, an engaging and open-minded young man (who I am sure the Sussexes will like) has written about a wide array of pension and investment disasters which have befallen thousands of victims since 2010. I would urge Meghan and Harry to contact him: Tom’s email address is: Tom.Kelly@dailymail.co.uk and his editor’s address is: Geordie.greg@dailymail.co.uk
As the disillusioned Royals are bound to ask whether pension scam victims have anything to do with them (or whether they should even care about people who have lost their life savings or pensions), they might like to consider the following:
If Frogmore Cottage catches fire, Meghan and Harry will have to call the Fire Brigade. The sumptuous property cost £2.4 million to refurbish to the highest possible standard, but even the best sparks do sometimes make the odd mistake. The Royals’ home – and even their lives – will be in the hands of the firemen. These brave firefighters will risk their own lives running into the burning building; then will rescue the people and (hopefully) save the building.
If Meghan and Harry’s baby son Archie is unwell after inhaling smoke, they will rush him to hospital – where he will be tended to by nurses and doctors.
If a therapeutic trip to Canada is required (to get over the upset of their home being damaged by fire), the plane will be flown by two pilots.
Pension and investment scammers target people from all works of life – including firemen, doctors, nurses and airline pilots. Next time the Sussexes place their hands into the lives of any of these professionals, they might like to consider whether these people are victims of scams and are worried sick about their financial losses.
Scammers don’t care what their victims do for a living: sparks, chippies, builders, gardeners, taxi and bus drivers, soldiers, care workers, architects, scientists, accountants, artists, police officers…the list is endless – and includes airline pilots.
Meghan and Harry need not think that going to Canada will get them far away from the world of pension and investment scams. These criminals have long arms and can easily reach as far as North America – and well beyond. The long list of highly-organised scams includes schemes in the UK and all expat jurisdictions across the globe – including Canada.
Coming from a privileged background where Harry’s Mum gets paid more than £8 million a year (and Meghan and Harry are reportedly worth around £30 million), it is going to be hard to get their heads round the poverty thousands of victims are facing. Perhaps cutting the purse and apron strings will teach Meghan and Harry just how hard it is to earn a crust – and save for a retirement that isn’t handed to them on a plate.
While the Duke and Duchess of Sussex fly backwards and forwards between the UK and Canada, perhaps they might like to ponder a few things:
How to keep the plight of pension and investment scam victims in the headlines
How to encourage the government to make financial regulation effective
How to provide a law-enforcement system that ensures all scammers are jailed
How to get the law changed to ensure HMRC pursues the perps rather than the victims
Whether the pilot of their plane has lost his pension and hasn’t got his mind entirely on the job
If Meghan and Harry do accept this challenge, they will have to accept that it won’t be easy. The scammers are determined, hard-nosed and hard-hearted criminals; the regulators are lazy and mostly asleep at the wheel; the police are over-stretched and under-resourced; the government hasn’t got a Scooby – and anyway can’t think beyond Brexit. This is evidenced by the fact that the moronic Chancellor Sajid Javid appointed arch FCA failure Andrew Bailey to govern the Bank of England. Boris Johnson was just as bonkers to endorse this ridiculous decision. When he told the Queen of the appointment, she should have given him a good slap round the earhole. (Mind you – she was probably a bit preoccupied about the company Uncle Andrew was keeping at the time, and she probably thought “oh well, at least Bailey isn’t a paedophile”).
The biggest challenge in fighting pension and investment scams is how to help prevent further victims. The best way to do this is to keep the topic firmly in the public eye – and that means encouraging the press to keep the subject in the headlines (and not let it get shoved out of sight by trivia). The other important role that Meghan and Harry could play would be to ensure that politicians keep their promises. A couple of years ago Boris Johnson promised a group of his constituents that he would tackle pension scams. But nothing happened and now he is ignoring them. We all know he’s been a little busy recently, but leaving his own constituents hanging after promising he would help them is not acceptable.
I remember being with two Ark victims at least five years ago and begging journalists at The Sunday Times and The Sun to run an article on the Ark scam. They all said it wasn’t “sexy enough”. Mark Atherton of The Times wrote a very good piece in The Times in 2014, but he was severely threatened and never wrote about pension scams again. https://www.thetimes.co.uk/article/pension-scam-leaves-victims-in-debt-k33rlcs25wc
Just think how many victims could have been prevented had the media done their duty and fully exposed the parties who caused and facilitated these scams since 2010. Then think how many suicides and stress-related deaths could have been prevented. Consider how much money could have been saved from destruction – and how many people could have been looking forward to a well-earned and comfortable retirement rather than abject poverty and misery.
In October 2019, The Mail’s Tom Kelly came to my office in Spain and spent several days with me. I went through the whole history of Stephen Ward and Ark (followed by Capita Oak and more than a dozen others), as well as James Lau and Salmon Enterprises, Paul Baxendale-Walker, Peter Moat and Darren Kirby’s Continental Wealth Management. I explained to Tom in detail how the flow of money works from the ceding pension providers: Aviva, Standard Life, Prudential, NHS, Police and Local Authorities etc., to the receiving schemes; what the difference between personal and DB pensions is and how the whole bogus occupational scheme fraud worked. Most important, we went through how hidden commissions and high-risk, toxic investments often destroy victims’ funds – as well as the life bonds such as OMI, SEB, Generali, Friends Provident, RL360 which lock investors in to entirely unnecessary, inflexible and expensive offshore bonds – AND PAY FAT COMMISSIONS TO THE UNQUALIFIED, UNREGULATED SCAMMERS.
In case Meghan and Harry are still unsure whether patronage of an initiative to outlaw pension and investment scams is their cup of tea, I will share, yet again, the video which features the death of CWM victim Mark Davison:
Laura Shannon of The Mail On Sunday attended Mark’s memorial service and interviewed dozens of further CWM victims in September 2019. While five months pregnant, Laura made the journey to Denia, Alicante, in fierce heat – putting all other so-called investigative journalists who write about financial services (or not, as the case may be) to shame. Not even stopping to recover from an arduous bus journey from the airport, she got stuck straight in and wrote an excellent piece: https://pension-life.com/continental-wealth-management-plunder-in-paradise/
Responsibility for reforming financial services and bringing culpable parties to justice may lie with governments, regulators, police and HMRC. But Royals could do their part too. Meghan and Harry: get stuck in to a worthy cause. Find out what the real world is really like for ordinary, decent, hard-working victims of pension and investment scams.
Finally, I am enormously grateful to Shadow Chancellor John McDonnell for calling out our idiot Chancellor Sajid Javid over the appalling appointment of Andrew Bailey as Governor of the Bank of England. Anyone who fancies dropping him a line can reach him here: mcdonnellj@parliament.uk or here: lowderh@parliament.uk
Despite the 2017 demise of Continental Wealth Management – run by Darren Kirby and his partner Jody Smart (Bell/Kirby) – former CWM scammers have continued to ply their evil trade. Pension scammers don’t just go away – they join or set up other firms and continue their profitable, illegal work. Just as leopards don’t change their spots, scammers don’t change their modus operandi. They use the same old same old dirty tricks as used by CWM for nearly ten years since the firm was set up by Darren Kirby and Paul Clarke: essentially an illegal insurance bond sales operation – followed up by toxic, high-risk investments paying the highest possible commissions to the scammers. They don’t bother with regulations or qualifications and routinely forge signatures on investment dealing instructions.
The CWM pension scam in Spain must be a lesson to all; phoenixes run by former CWM scammers must be exposed and closed down; firms with only an insurance license must not give illegal investment advice; insurance bonds must no longer be sold illegally in Spain and elsewhere; commissions must not be fraudulently concealed; advisers must be qualified; illegally-run offshore “networks” must be outlawed and disbanded.
Stephen Ward of Premier Pension Solutions S.L., Premier Pension Transfers Ltd., Dorrixo Alliance and Marazion, seems to have given up his scamming operation and is now re-developing his former office in Moraira into a luxury villa with pool. Having ruined thousands of victims with his various pension scams: Ark, Evergreen, Capita Oak, Westminster, London Quantum etc., he then went on to “advise” thousands more victims on the transfer of their DB pensions into the hands of more offshore sharks and scammers. All these victims will have been transferred into QROPS and then put in unnecessary, expensive insurance bonds such as OMI, and then invested in high-risk, high-commission rubbish which will have destroyed substantial amounts of money.
Stephen Ward had his own portfolio of clients as well. He ruined most of these by investing their life savings in high-risk, high-commission funds such as EEA Life Settlements, Axiom Legal Funding, Mansion Student Accommodation, Aria and Blackrock Gold.
Stephen Ward had been issuing all the transfer advice reports for the CWM victims, but then in or around 2015 he was replaced by CWM scammer Martyn Ryan of FCA-registered Global Financial Options who took over from Ward in facilitating the CWM scam which ruined up to 1,000 victims. Ryan now runs Infinity Claims – a claims management company which, ironically, purports to help victims of unsuitable pension transfers (you couldn’t make it up!). Best (or worst) of all, Ryan’s new firm is also FCA regulated. You can quite see how victims get scammed when regulators give the scammers the very tools they need to trick their victims into handing over their life savings.
Another prolific CWM scammer was Phill Pennick. He, like all his colleagues at the unregulated Continental Wealth Management firm on the Costa Blanca, conned hundreds of victims into having their pensions and life savings placed into illegally-sold insurance bonds by OMI, SEB and Generali, and then invested in toxic structured notes provided by Royal Bank of Canada, Commerzbank, Nomura and Leonteq. Victims lost up to 100% of their funds while Pennick and the rest of Kirby’s team of scammers earned fat, concealed commissions from the insurance bonds and structured notes.
Pennick went on to set up his own “IFA” practice – Pennick Blackwell – at two office addresses on the Costa Blanca: Albir and La Nucia. Former mortgage broker Pennick – and his associate Kristoffer Taft (former barman with no qualifications) proceeded to scam more victims and openly commit criminal offences by selling insurance bonds illegally in contravention of the Spanish insurance regulations. In the past few days, the Albir Pennick Blackwell office has closed down and been emptied of all furniture and light bulbs. It is not known whether Pennick (who had also been running an estate agency and a mis-sold mortgage claims management company) is now on the run or whether he has simply done a “phoenix” somewhere else. Certainly, the public should be wary and report any sightings of this serial scammer.
Another phoenix from an ex-CWM scammer is Roebuck Wealth run by Paul Clarke. Clarke was one of the original founders of Continental Wealth Management, along with head scammer Darren Kirby. The pair parted acrimoniously and Clarke went on to promote Stephen Ward’s Ark scam and to build a successful business as an insurance bond and structured note salesmen – committing criminal offences by flogging both sets of products throughout Spain. Earning huge commissions from both bonds and toxic investments with illegally-concealed commissions, Clarke sought out some of his new victims on Facebook – using the name “Bella and Alfie” to hide his real identity.
Openly committing a series of criminal offences by putting clients into bonds and investments which were entirely unsuitable and risky, Clarke concealed his commissions and routinely destroyed his clients’ funds. Interestingly, Clarke seems to have scrubbed the internet of all trace of his firm – Roebuck Wealth – and of himself. Openly prowling the Costa Blanca for more victims in his Aston Martin, Clarke now works closely with the local Masons which provides him with a large stock of further victims to keep him in his champagne lifestyle.
Some of the former CWM scammers managed to get jobs with other financial advisory firms when Continental Wealth Management collapsed in September 2017. Ethical firms who had inadvertently employed these scammers, without realising the extent of their crimes, immediately sacked them when they discovered the truth. One exception to this is the Spectrum IFA Group. This outfit – which purports to be a financial advisory firm – currently employs former CWM scammer Dennis Radford.
However, when warned that they were operating illegally by providing investment advice in Spain and other countries – as well as selling insurance bonds illegally in Spain – Spectrum’s Michael Lodhi refused to sack Radford. Lodhi then went on to attempt to justify the firm’s illegal activities and to defend Radford. Radford had acted as “Senior Partner” at CWM and had been heavily involved in the scamming activities of the firm for some years. The email exchange between Lodhi and me is reported below. This exchange reveals the extent of Spectrum’s illegal activities – in which Radford now plays a key role.
Pension Scammers in Spain – CWM must be a lesson to all.
The Continental Wealth Management scam must be a lesson to all. The public must be made aware of the crimes which have already been committed by the former CWM scammers and must avoid them at all costs in the future. Quite a few of these vile predators are now in the process of being prosecuted and will hopefully serve long jail sentences. But in the meantime, while the Spanish justice process plays out, it is essential that the public should remain vigilant. The scammers are very much alive and active – especially on the Costa Blanca along the eastern coast of Spain (where there is a large concentration of British expats).
RESPONSE BY ANGIE BROOKS OF PENSION LIFE TO LETTER FROM MICHAEL LODHI OF SPECTRUM IFA GROUP
LODHI: We have examined your website and posts and would like to correct some details about our firm that you may have misunderstood.
ME: There is nothing I have misunderstood.
LODHI: Spectrum IFA Group is not a company. It is our brand, a pan-European registered trademark. This is clearly stated on our website and our literature: For Spain “The Spectrum IFA Group” is a registered trademark, exclusive rights to use in Spain granted to: Baskerville Advisers S.L. | CIF B-63/137.020 | Correduría de Seguros; No de registro RDGS J2306.
ME: And this does not authorise Baskerville Advisers S.L. to provide investment advice. Therefore, you are breaking the law by doing so.
LODHI: We provide financial planning services and advice using Insurance based Investment Products (IBIPs) which are both Spanish compliant and tax efficient in Spain.
ME: Your firm is authorised for insurance mediation and this does not cover investment advice. The products to which you are referring are insurance bonds (e.g. OMI, SEB, Generali etc) which are mostly sold illegally in Spain. These companies have facilitated widespread financial crime – including fraud – for many years. This has involved giving terms of business to unregulated firms such as CWM and allowing many millions of pounds’ worth of life savings to be destroyed (by the use of high-risk, high-commission investments).
LODHI: Regulation of these products is covered in the Insurance Distribution Directive. More information is available here: https://ec.europa.eu/info/law/insurance-distribution-directive-2016-97-eu_en Article 2 – Definitions point (17) of DIRECTIVE (EU) 2016/97 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 20 January 2016 on insurance distribution (recast) page 30 states: ‘insurance-based investment product’ means an insurance product which offers a maturity or surrender value and where that maturity or surrender value is wholly or partially exposed, directly or indirectly, to market fluctuations The appropriate regulator in Spain for such IBIPs is the DGSFP.
ME: The DGS does not regulate the products themselves – it regulates the way the products are sold (mediated). And most advisory firms in Spain do this illegally (in contravention of the DGS regulations). Also, the Spanish Supreme Court has deemed life assurance policies (such as OMI bonds) to be invalid for the purposes of holding investments.
LODHI: For your information another of our group companies is a licensed investment advisory firm (Mifid) however this licence is not required for our current activity in Spain.
ME: Which company? You are clearly giving investment advice, so how is your organisation authorised to do this – particularly in Spain?
LODHI: Our consultants are trained in accordance with Spanish rules laid down by our regulator, the DGSFP.
ME: I think you have to be clear what your “consultants” do. Are they advisers or just bond salesmen? If the Spanish rules say that consultants (or salesmen or advisers) don’t have to be qualified, then you are right. Most of your salesmen have no qualifications (although some of them do lie about being qualified). The only ones with verifiable qualifications are Robin Beven, John Hayward, Chris Burke and Jonathan Goodman (as far as I can see). Perhaps you can update me on this so I can republish this blog with the latest information: https://pension-life.com/spectrum-ifa-group-qualified-and-registered/
LODHI: All of our financial planning advice is produced and signed off centrally via our technical and compliance department.
AB: That’s a funny sort of “compliance” department if it signs off investment advice which is not licensed. Perhaps you ought to sack all your compliance people since they clearly don’t understand that a firm cannot give investment advice (which many of your salesmen clearly claim to do on your own website) without being licensed to do so.
LODHI: In addition, our pension transfer advice (TVAS reports) are also provided centrally by a Fellow of the Chartered Insurance Institute who holds all the up to date UK pensions qualifications.
ME: Which one of your staff is this?
LODHI: Where appropriate, further pensions transfer advice is provided by an FCA authorised pension transfer specialist who holds all current UK pension advice permissions.
AB: Who? (as in – who is the allegedly FCA-authorised pension transfer specialist providing transfer advice to Spectrum?)
LODHI: It is not a requirement in Spain that our consultants hold UK financial planning qualifications, however many do hold these. For example John Hayward holds the following UK qualifications: Chartered Insurance Institute Financial Planning Certificate (3 parts 1. Financial Services and their regulation 2. Protection, savings and investment products 3. Identifying and satisfying client needs.) Chartered Insurance Institute G60 Pensions Institute of Financial Services Certificate in Mortgage Advice and Practice
AB: And hereby lies the problem, of course. Offshore firms such as yours concentrate on the expat market – which involves UK pensions. So of course a genuinely ethical and professional firm would ensure that advisers hold the relevant UK qualifications. This is one of the reasons why so many British firms offshore cause victims’ losses – because the advisers are not qualified and only know how to be salesmen targeting maximum commissions rather than giving proper independent financial advice.
LODHI: Dennis (Radford) approached us whilst working with Continental Wealth Management (CWM) part of the Trafalgar International Gmbh network. He was neither an owner nor a Director of that firm.
AB: Radford was a “Senior Partner” (of Continental Wealth Management) – although neither a shareholder nor a director. His title must have told you that he had held a senior position within the firm. This should have given you a clue that he was an integral part of this scam.
LODHI: Having worked with CWM for some time he realised that the products sold inside life assurance policies were not in his client’s best interests.
AB: It would be interesting to know how many minutes he took to realise this. He could easily have checked to see how insurance products are supposed to be sold – and had he done this he would have realised immediately that ALL the life bonds (OMI, SEB and Generali) were being sold illegally by CWM. With the structured notes, all the term sheets clearly bore the words: “for professional investors only” and “risk of loss of part or all of your capital”. So he should have stopped immediately. But as you have confirmed, Radford continued selling these products “for some time”. Perhaps you would be kind enough to disclose exactly how many people Radford scammed out of their life savings during the time he was “Senior Partner” at CWM?
LODHI: After investigating our working methods and procedures Dennis applied to join our firm.
AB: It was at this point that you should have told Radford in no uncertain terms that under no circumstances would you take on a bond salesman who had been working for a firm of scammers. But clearly you welcomed him with open arms.
LODHI: His main request was that we assist him with his existing clients by moving them (where possible) into funds from Spectrum’s approved fund list – EU compliant, daily traded, from household name fund managers, without initial fees, initial commissions or exit penalties.
AB: But that would have involved giving investment advice – and Spectrum was not licensed to give investment advice.
LODHI: Dennis continues to assist his clients transferred to Spectrum from CWM along with other clients from other IFA firms with similar issues around QROPS and Fund selection inside IBIPs.
AB: Again, this involves investment advice. Radford is not qualified to do this, and Spectrum (or Baskerville) is not authorised to do this.
LODHI: We understand you are trying to help expatriates in Spain who may have been subject to mis- selling by IFAs.
AB: Correct. We are taking criminal action against the directors and shareholders of CWM for the fraud and disloyal administration (a criminal offence in Spain) committed by the director and shareholders of the company. Now that it has become clear that Radford held a senior position of responsibility and authority in the company, I will be taking legal advice as to whether he should be added to the list of defendants.
LODHI: It is important for your business’ credibility that your posts are factually correct.
AB: My posts are factually correct. But this isn’t about my business; it is about your business – and your credibility. And you are employing unqualified “advisers” and are giving unauthorised investment advice – along with employing Radford – a known ex-CWM scammer. Most decent, ethical firms immediately sack scammers when they realise their provenance and it is disappointing that you have not taken such proactive action and are still harbouring him.
LODHI: Several posts on your site imply that our firm is carrying out an activity that is illegal.
AB: Correct. You are giving investment advice without being authorised to do so. Further, the way your firm is selling insurance bonds is illegal. I don’t know what the Spanish regulations say about employing ex scammers – perhaps you could enlighten me?
LODHI: This is clearly not the case.
AB: It is, indeed, clearly the case.
LODHI: We ask that you remove these posts immediately in order that we avoid having to take action.
AB: Hopefully, the action you will take will be to sack Dennis Radford without further prevarication.I will be happy to update the qualifications on the post about your staff if you provide me with links to evidence on each one.
LODHI: Like you, we have tried to assist people who have been subject to bad advice in Spain and we continue to do so.
AB: If this is true, it is such a shame that you have employed one of the very people who was giving “bad” advice and who had been a “Senior Partner” at CWM – the very firm which scammed 1,000 victims out of their life savings.
LODHI: We understand that financial services regulation within the EU is complex.
AB: It is not complex at all. In Spain you have to comply with Spanish regulations – irrespective of where or how you are regulated.
LODHI: We are ready to assist you in understanding the facts and procedures should this be of use to you.
AB: If I ever find myself in a position where I feel I require assistance from a firm which is employing a known scammer and is providing investment advice without being authorised to do so, you will be the first to know.(However, I wouldn’t hold my breath if I were you).
LODHI: Brexit. Be aware that in the event the UK leaves the EU without a deal or with Mr Johnson’s current deal, then, as it stands, IFAs licensed and regulated in the UK or Gibraltar will be unable to advise or service clients from the date of leaving. A Spanish licensed brokerage like ours will have no such issues.
AB: Brexit or no Brexit, your firm is not licensed to provide investment advice. Further, it is obliged to conform to Spanish regulations. That will not change.
LODHI: We look forward to hearing that your erroneous posts have been removed.
AB: There are no erroneous posts – unless you would care to help me update the qualifications on last year’s post?
Clearly, Lodhi is happy to continue to employ one of the CWM pension scammers. He has no intention of learning any lessons and the public must be extremely wary of Spectrum IFA Group as it is breaking the law in Spain.
