Tag: Friends Provident International

TOP 3 WORST LIFE OFFICES
For over a decade, life offices (more accurately known as “death” offices) have been the centre of millions of pounds’ worth of destroyed pensions. So here we are going to name the top 3 worst life offices…

These are just some of the things they’ve been up to:
- Collaborating with scammers: unregulated, rogue firms posing as “advisory” firms
- Giving terms of business to firms run by people with criminal records for embezzlement, fraud, theft and proceeds of crime (as well as murderers, drug dealers and prostitutes)
- Paying hidden commissions to unlicensed, unqualified advisers with a long track record of scamming
- Accepting obviously forged investment dealing instructions from the scammers
- Reporting on huge losses in pension portfolios without warning the victims not to use the scammers responsible any longer
- Continuing to charge disproportionate fees even after the loss of half or more of the pension. (There are, in fact, some victims whose entire portfolios have been destroyed – but the death offices keep on applying their charges long after there is nothing left)
- Offering high risk, toxic investments paying huge commissions to unqualified advisers and scammers on their investment platforms
- Failing to disclose the secret commissions paid to the scammers
- Failing to treat investors as “retail” or unsophisticated investors
- Failing to obtain confirmation from the victims that they understand the risks involved in both the insurance bonds and the toxic investments – which are only suitable for professional investors
In fact, much of what these death offices have been up to is outright fraud. The public needs to be warned. The existing victims are suffering terribly – dealing with poverty and extreme distress. Some of them are dying; some of them have died – killed by the death offices’ and the scammers they do business with.

The most important thing of all is to try to prevent further victims. But this is difficult because so many scammers are still aggressively selling their victims these toxic, unnecessary and expensive death bonds. Also known as “portfolio bonds”, “offshore bonds” and “wrappers”, these products pay the scammers huge commissions which are hidden from the victims.

So who are the three worst offenders:

David Kneeshaw

Number 3. Friends Provident International – based in the Isle of Man and run by David Kneeshaw – Executive Director and Group Chief Executive Officer. Kneeshaw also runs RL360 – another death office – which bought Friends Provident International a couple of years ago for a quarter of a billion pounds. Friends Provident International has a long history of investing its victims’ life savings and pensions in toxic, risky funds such as Axiom Legal Financing, LM Managed Performance, Premier New Earth, Premier Eco Resources, and Kijani . These investments were high risk and unregulated as well as only suitable for sophisticated or professional investors.

Paul Thompson

Number 2. Generali (now known as Utmost International) – based in Guernsey and with the head office in London. Utmost has terms of business with the worst of the scammers in the advisory community – paying the illegal, secret and abusive commissions and featuring the worst of the highest-risk investments (including structured notes with a risk to the investor of total loss). Run by Paul Thompson – who claims to have over 30 years of industry experience as an investment banker. Generali – or Utmost – has a track record even worse than Friends Provident International’s. The same secret commissions are paid to the same scammers – with the same result – crippling losses, poverty, misery – and even death for the victims.

Peter Kenny

Number 1. Old Mutual International (now known as Quilter International) – Based in the Isle of Man and the Republic of Ireland, this death office used to be run by Peter Kenny who was a former Isle of Man regulator. But being a former regulator didn’t stop Kenny from doing business with the worst of the unlicensed pension scammers and allowing them to forge signatures on investment dealing instructions. Being a former regulator didn’t stop Kenny from paying out millions in illegal commissions to the dross of the offshore financial services community – for illegally-sold death bonds and unregulated investments and structured notes. Quilter International was sold to Utmost International last year (2021) for nearly half a billion pounds. Because there’s money in misery; there are fortunes to be made out of trading with criminals; there are huge profits to be made out of contravening pretty much all of the EU regulations.

All of the worst three life/death offices are still doing a roaring trade. Business has returned to pre-pandemic levels. Europe is their biggest market – with many of their victims based in Spain, Italy, Germany and other expat countries.

International Adviser – the advertising and marketing rag for the death offices – reported last week that not only was business booming for the death offices, but was now exceeding pre-pandemic levels. In 2020 they wrote £58 billion worth of business. And in 2021 it was £68 billion.

But these huge numbers mean nothing to the victims who have lost their homes, their marriages, their retirement futures. Three quarters of a billion pounds may mean nothing to the likes of David Kneeshaw, Paul Thompson and Peter Kenny. Sometimes fifty grand can mean the difference between life and death for a victim of the death offices. With Friends Provident, Utmost and Quilter International likely to do £78 billion worth of business in 2023, there will be even more misery, destitution, and death for the victims. And the scammers will already be counting their future profits from the illegal commissions.
July 20, 2022
Fraud in Spain – Julius Baer

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.

Julius Baer proudly reports that it has created a new team, headed by Claudio Beretta and Claudia Linares, which includes Jorge Saavedra Doménech and Carlos Navarro Sabán.

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.

June 15, 2022
Pension Scams Explained – Stage 2

Our last blog in this series recreated the offshore pension scam process. We covered the set up and hard sell. The slick salesman prepared the unwitting victim and convinced him his pension would be better off out of the UK.

The silver-tongued spiv, Darren, posing as an adviser, conned his new client with no problem at all. The poor victim was duped into believing he should transfer his pension into a QROPS – an overseas pension scheme. The con worked because the experienced scammer pressed all the right buttons:

Your pension will be looked after better, it will be cheaper to manage, you’ll pay less tax, you won’t lose half of it when you die, you’ll get to choose your own pension investments!

Of course, the scammer, didn’t point out that once out of the UK, John’s pension would have no protection. Complete control of the money would be squandered will now lie in the hands of the unqualified, unlicensed scammers.

The victim, John had stressed:

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.

But sadly he’s played right into the scammer’s hands. His precious pension will be transferred into a QROPS and then into an insurance death bond:

John: I worked for thirty years to build up that pension and I don’t want anything to happen to it.

Darren: So, let’s look at all the ways you can improve your pension and make sure its protected.

But far, far from improving or protecting the investor’s pension, the scammer has removed the precious retirement fund from the safety of the UK. He’s sent it off to Malta or Gibraltar and then on to the Isle of Man or Guernsey. The money is now well beyond the protection of British regulation or compensation.

John had stressed how he wanted low risk, but has now signed dozens of forms – and this will guarantee that his pension will be exposed to high risk. Darren didn’t give him a chance to read or understand these long and complex forms. And the most important form of all was a blank investment dealing instruction. Once this has been signed by John, the scammer can copy it dozens of times and invest the pension money in whatever pays the highest commission.

The whole point of this scam is for the scammer to make money out of the victim by a whole series of hidden commissions.

Darren: My firm would charge you a small fee for setting up the transfer and then looking after your pension investments moving forwards.

But what will actually happen is that the scammer will openly charge three or four – or more – percent in set-up fees, plus one or two percent a year service charge. But, under the table, he will earn a further 7% hidden commission from the death office – such as Quilter International, Utmost International, RL360 or Friends Provident.

Darren: Right. And then we can start investing your pension and making it grow – so you’ll be able to have a happy and healthy retirement.

John, and all the other victims, will be a long way from being happy or healthy. Because the death office has a platform that the scammer will use to pick the highest-commission investments. So John’s pension fund will be used to line the scammer’s pockets for the next ten years – as he will be stuck in the death bond for that long.

Investments that pay the highest commissions – such as structured notes and unregulated collective investment schemes – are also the highest in terms of risk. John’s pension can now only lose money. And as the value of his hard-earned retirement savings goes down and down, the scammer’s commissions will keep on going up and up.

John, along with all the other victims, will end up losing part – or all – of his pension. He may well lose his home, see his marriage break up, develop depression or a life-threatening illness. He may even take his own life.

But John and his dire poverty will be long forgotten by the slick, silver-tongued scammer. He’ll be busy rubbing his hands with glee at his next batch of victims. Because there’s plenty of them and this form of pension fraud is showing no sign of slowing down any time soon.

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May 25, 2022
Pension Scams Explained
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.
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March 30, 2022
Utmost Fraud approved by EU Commission

Utmost (formerly Generali) is proposing buying Quilter (formerly Old Mutual). The deal is due to be completed by December 2021. The agreed price is nearly half a billion pounds. It is reported that Margrethe Vestager, Vice President of the European Commission, has “approved” this acquisition.

Margrethe Vestager – EU Commissioner Executive Vice President

The “approval” by the European Commission of this deal is an insult to thousands of victims of pension and investment fraud. Widespread financial crime has been facilitated, encouraged and rewarded by Utmost and Quilter over the past decade. The appalling result has been the destruction of millions of pounds’ worth of life savings and pensions.

Margrethe Vestager, EU Commissioner Executive Vice President, has proved that the Commission hasn’t got a clue about Utmost’s and Quilter’s role in offshore financial services fraud. And this deal between these two death offices will create a monopoly over fraud against expats in Europe.

For death offices – such as Utmost and Quilter – fraud against expats is clearly a lucrative business with a huge market. The horrific damage – including distress, poverty and suicide – gives neither Utmost’s CEO Paul Thompson nor Quilter’s CEO Paul Feeney any cause for concern. Thompson has described the proposed acquisition as:

“highly attractive and in line with our growth strategy”.

But growing an industry based on fraud should neither be countenanced by the European Commission – nor the European Markets and Securities Authority.

Paul Feeney CEO of Quilter

Paul Thompson CEO of Utmost

Utmost Fraud approved by EU Commission

Utmost announced the planned takeover in April 2021. CEO Paul Thompson has bragged this would add £22 billion and 90,000 policies to its existing portfolio. This would give the Utmost/Quilter combo a total of £58 billion of funds. And much of this will have been acquired through fraud. It will also give them 600,000 “customers”. And many of these will have been victims of fraud – some of them currently on the verge of suicide.

The toxic assets and suicidal victims result from Utmost’s and Quilter’s long-standing practice of giving terms of business to unlicensed scammers. These death offices have paid huge, undeserved and undisclosed commissions to these scammers for more than a decade. And there is no sign that there is any intention to pay redress to the thousands of victims who have lost their life savings and pensions in death bonds.

The Commission’s approval of this iniquitous acquisition is a grave insult to Utmost’s and Quilter’s existing victims. It also puts thousands of British expats across Europe at risk of becoming future victims of the fraudsters to whom the death offices give terms of business.

There are three clear strands to the fraud with which both Utmost and Quilter are undeniably complicit:

1. The insurance bond – also known as a life, portfolio, or offshore bond. This is the core “product” routinely used and abused by the unethical sector of the offshore financial services market. This toxic sector – which includes many known scammers – sells products and not advice. Bonds can – under certain, limited circumstances – play a valid tax-mitigation role in the UK. But offshore, they serve zero purpose – other than to pay commissions to many unauthorised introducers and fraudsters posing as advisers. Insurance bonds should never be used with offshore pensions (QROPS) since the pension is already a tax “wrapper” in its own right.

2. The terms of the insurance bonds are clearly abusive to consumers as retail, inexperienced investors. The high charges are mostly for the purpose of clawing back the concealed commissions paid to the introducers (many of whom are unauthorised). Utmost and Quilter had known for years that large numbers of these introducers had no license to provide insurance mediation or investment advice. They had also known that these same introducers had long-established track records of mis-selling and fraud. And yet Utmost and Quilter continued to give them terms of business. They allowed them to invest thousands of victims’ pensions and life savings recklessly – and disastrously.

3. The toxic, illiquid, high-risk “investments” offered by the death offices. These products were offered on the death offices’ platforms for the scammers to sell to their victims. Investment products have included dozens of failed funds such as LM, Axiom, Premier New Earth, Quadris Forestry and Kijani. Worse still are the professional-investor-only structured notes supplied by Leonteq, Commerzbank, Royal Bank of Canada and Nomura.

This toxic “triptych” has resulted in horrific losses for thousands of victims over the past ten years. And if this iniquitous acquisition goes ahead, there will be just as many – if not more – casualties in the next ten years. The EU Commission – along with ESMA – will be complicit.

Of course, I might be entirely wrong: Utmost’s half a billion might have been subject to a sequestration deal enforced by the Commission. Perhaps this money is going to be used to repay all the victims the hard-earned money they have lost? And any surplus used to prosecute the dozens of fraudsters to whom the death offices had given terms of business? (Sadly, I am not often wrong).

Death offices Utmost and Quilter (as well as FPI and RL360) have routinely given terms of business to known scammers and unlicensed salesmen posing as advisers since 2010. They have created a toxic industry of selling dodgy products – not professional financial advice. The result has been predictably awful. Victims have paid the price with poverty and misery in retirement. Utmost’s acquisition of Quilter is likely to result in a huge increase in this widespread crime.

The facts behind this perilous situation are irrefutable. Quilter itself is suing Leonteq for £200 million for just one series of high-risk structured notes. This was for an extra 2% hidden commission on top of the 6% hidden commission allowed by Quilter. Chief Executives Peter Kenny and Paul Feeney know that these toxic products should never have been promoted to retail, naive investors. Kenny and Feeney are fully aware that their unlicensed introducers will sell any toxic and high-commission crap to their victims.

John Ferguson (left) & David Vilka (right) of Square Mile International

In 2016, Quilter provided hundreds of these toxic Leonteq structured notes (with total concealed commissions of up to 14.57%) to distributors such as Satori, Mayfields and Morgan Capital. Quilter also sold these notes to known, serial scammers Square Mile International. In the same year, Utmost sold the same Leonteq notes with hidden commissions of over 12%.

Utmost Fraud approved by EU Commission

The EU Commission needs to understand why Utmost’s proposed acquisition should not go ahead. In their Introducer Terms of Business Agreement, Utmost opens with a false statement:

“Following completion of due diligence we are pleased to confirm your terms of business have been authorised on the following commission basis”.

But there is no due diligence. There are no checks on how the firms are licensed, or whether any of the staff or sub agents are qualified to provide insurance or investment advice. And certainly no acknowledgement that the commissions must be openly disclosed to the victims.

The starting point for the hidden commissions is that 140% of the victims’ portfolio will form the basis for the payment. A fact which is never disclosed to the victims.

The Utmost Introducer Agreement requests details of the applicant’s experience and qualifications, in addition to membership of professional bodies or trade associations. The application form also asks for confirmation of regulatory status in the markets where the firm operates. They also ask for details and proof of professional indemnity insurance. Therefore, Utmost acknowledges that these are essential factors for a legitimate introducer. They willingly enter into terms of business with many unlicensed, unqualified scammers. These scammers have no experience, qualifications, membership of professional bodies or trade associations, and no essential regulatory status. They also have no professional indemnity insurance.

In 2014, Utmost accepted one bond application from a victim resident in Spain. Her “adviser” (introducer) had no license to provide either insurance mediation or investment advice anywhere in Europe. And yet Utmost gave this firm complete freedom to invest the victim’s funds – accepting 19 separate investment dealing instructions (mostly with forged client signatures) totalling 529,251.80 Euros. All of the investments were professional-investor-only, high-risk structured notes provided by Leonteq, Commerzbank, Royal Bank of Canada and Nomura. Between 2014 and 2018, Utmost and the scammer between them destroyed over 75% of the victim’s fund. The destruction was caused by repeated structured note failures and the inexorable high charges by Utmost. When the victim finally took out what little was left, Utmost charged her a hefty early-exit penalty. There was no recognition of the horrific destruction Utmost had facilitated.

Criminal proceedings against this, and other associated firms, are now in progress in Spain. However, the main lead complainant – also an Utmost victim who lost most of his portfolio – has recently died. Much of his life savings and pension – which started out at three quarters of a million pounds – were destroyed by Utmost and the scammer. The causes of the losses were not only the toxic structured notes but also some unregulated, professional-investor-only funds such as the Quadris Brazilian Teak Forestry Fund. The deceased victim’s disabled widow is now facing poverty on top of bereavement.

Of course, Quilter has performed just as atrociously as Utmost over the past decade. Thousands of Quilter’s victims are facing similar poverty and suffering at the hands of the same scammers. This fraud is facilitated and rewarded by hidden commissions and the freedom to invest portfolios without the victims’ knowledge, using forged client signatures. With similar callousness, Quilter has allowed the flotsam and jetsam of the offshore cowboys to commit the exact same type of fraud as Utmost has.

One such scammer – with Quilter terms of business – boasts that his qualification to work in financial services is working as a bar manager and managing a successful sales company:

https://pennickblackwell.com/pennick-blackwell-team/

Kristoffer Taft of Pennick Blackwell

(formerly an agent of AES International and now an agent of Abbey Wealth)

If I am wrong, and the Commission has already made arrangements to freeze Utmost’s half a billion pounds, then I apologise unreservedly for doubting you. But if I am right, then the European Commission is just as bad as the death offices and the scammers.

August 17, 2021
International Adviser Awards
International Adviser Awards create buzz around Quilter’s, FPI’s and RL360’s facilitation of investment fraud and scams.

I am deeply flattered that International Adviser has invited me to enter for this year’s “Best Practice Adviser Awards”. The invitation was sitting – sparkling like a princess – in my inbox this morning. So, how could I refuse?

Pension Life is not, of course, an advisory firm. But I am sure International Adviser can think of a separate category for a firm which works towards bringing rogue “advisers” (in reality commission-hungry salesmen) and death bond providers to justice for the many scams they carry out and facilitate.

International Adviser’s awards are, apparently, “designed to recognise financial advisers within the industry that are beacons of excellence in promoting best practice”.

No doubt this also means acknowledging those which are beacons of fraud. Until the “chiringuitos” of the financial services world are shut down and jailed, best practice will always be held back.

Spain certainly leads the field internationally (which isn’t exactly difficult) when it comes to warning about the very types of scammers which have traditionally had terms of business with Quilter, FPI, RL360, SEB and Generali: the “death bond salesmen” who have destroyed millions of pounds’ worth of pensions and life savings.

International Adviser gives four reasons for entering the Best Practice Adviser Awards 2020 competition:
1. Highlight the success of teams within your business
2. Promote the key strengths that set your firm apart from the rest
3. Gain recognition within your industry for excellence in best practice
4. Use the winner’s logo
As International Adviser informs me that the total value of this “amazing” package is over £10k, I thought I would give it a go – what have I got to lose?! Here are my responses to the above four points:
1. The teams within my business have got eight scammers in court on criminal charges of fraud and forgery. These scammers were illegally selling Quilter (OMI/Skandia) insurance bonds – as well as SEB and Generali. Plus we’ve got nearly thirty more lined up ready for the criminal and civil courts in multiple jurisdictions in Europe and the UK. All these scammers were putting cautious investors into high-risk, toxic investments offered by the insurance companies.
2. Promoting strengths that set Pension Life apart from “the rest” is slightly tricky because the only other firm that I know of which does anything similar is Niall Coburn’s firm – Coburn Corporate Intelligence. As published by International Adviser on 2.6.2020, Coburn is using Daniel Spendlove of law firm Signature Litigation to sue Quilter (aka Skandia, OMI, TitsRUs) and FPI (now owned by RL360) for millions of pounds’ worth of investment losses caused to thousands of investors.
3. Gaining recognition for excellence will, of course, be very welcome – especially when a bunch of chiringuitos and overpaid executives at the death offices are behind bars.
4. I’m already experimenting with how my letterhead will look with the winner’s logo on it. I think the 30-second video will definitely feature Peter Kenny and David Kneesup in orange suits, and the daily bulletins will advertise the banning of commission-laden insurance bonds.
I assume my only competition will be the surfing, polo-playing Coburn who describes himself as “being committed to lending his critical thinking and expertise to complex regulatory, compliance and due diligence matters”.

Coburn advertises himself as being B.A. LL.B, LL.M, Dip. Bus. Admin. I assume part of the above means he can swim and drive a bus. No doubt Signature Litigation find those qualities helpful.

Even if I don’t win International Adviser’s prestigious award, I am hoping my entry will foster a warm and fuzzy friendship with International Adviser Editor Kirsten Hastings. Ideally, she and I can sit together at the trial of Quilter International/FPI/RL360. We can talk girlie stuff and I can teach her how to write shorthand during the boring bits.

Not entirely sure where the trial will be held, but it had better be a venue as big as Wembley Stadium to accommodate the inevitable large crowd which will want to attend. This will include thousands of victims of Quilter International, FPI International and RL360. Many of these victims have lost their life savings, so they will no doubt want to be present to see the likes of Peter Kenny, Steve Braudo, Paul Feeney, Steve Weston and David Kneesup brought to justice.

I predict that the death offices will try to hang the chiringuitos out to dry and blame the failed investments on their “inappropriate advice”. This is another reason why the courtroom will need to be big enough to accommodate a huge number of people: scammers from across the globe will need to be wheeled in to testify. The death offices will claim that all they did was make the bombs; it was the scammers who hurled them into the crowds of victims.

The court may want to ask the death offices why on earth they gave terms of business to so many unqualified, unlicensed spivs.

Any sober judge will struggle to understand why Quilter, FPI and RL360 accepted so many dealing instructions from barely literate con men (and women) – including a convicted murderer, several psychopaths, a long line of coke-snorting confidence tricksters/forgers, an alcoholic bar manager, several well-known serial scammers (including Stephen Ward) and a prostitute.

Even if Pension Life doesn’t win the coveted International Adviser award, I guess we’re likely to come second in our category. I wonder what the prize will be – lunch with Peter Kenny perhaps?
August 20, 2020
RL360 and FPI – ’til death (or poverty) do us part
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.

Another “hot” topic that Kneesup failed to mention was how the RL360/FPI “marriage” intends to compete with Quilter in the “race to the bottom” of offshore financial services. Of course, it won’t exactly be difficult since Peter Kenny – CEO of Quilter/Ann Summers – will deal with any old “advisers”. Kenny certainly isn’t fussy: the sole director of one of his leading “clients” from 2010 to 2017 was a former prostitute and porn star (whose firm destroyed much of the £100m placed in insurance bonds and invested in structured notes).

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”.

A number of “advisory” firms are now facing criminal proceedings for fraud, disloyal administration and falsification of commercial documentation – all of which involved the illegal sale of Quilter, RL360 or FPI insurance bonds. Kneeshaw now has a choice: help tackle this widespread crime, or keep on facilitating it.
July 21, 2020
DB transfers: FCA hasn’t a Scooby
The FC A hasn’t got a ****ing Scooby. The Federation of Consolidated Apathy has now proved way beyond reasonable doubt that it is clueless about pensions in general. And worse – much worse – that it doesn’t understand the deadly problems with DB pension transfer advice.

The Federation of Consolidated Apathy has published a video which deliberately misleads people into thinking that advisers will provide DB transfer advice which is in the victims’ interests.

This incredibly boring video seems to have been produced by some clot called Mark Goold who claims to work for the “Communications Division” of the FC A. He clearly has no understanding of communications since he has made a video that is so incredibly monotonous and dreary that it is impossible to watch – and even harder to believe. Either Goold knows nothing about ten years’ worth of DB pension transfer scams – or he is deliberately ignoring it.

Goold the goon says he “wants to talk about our expectations of financial advisers when they provide pension transfer advice”. A noble aim – just a shame he did no research before opening his mouth (and putting his foot in it). If he’d had even half a brain, he would have consulted the British Steelworkers before making such an utter fool of himself. Equally, he could have consulted a few of the thousands of victims of DB scheme members who have been scammed over the last few years because of FCA-regulated transfer sign-offs.

The one thing that Goold says that is true and accurate is “it will generally not be in a client’s best interests to leave a pension scheme that will provide them with a guaranteed and sustainable income when they retire”.

But he does not say what action the FCA is proposing to take against the negligent – and, in some cases, fraudulent – FCA-regulated advisers who have been signing off such transfers for so many years. These firms have facilitated widespread financial crime and this has led to the destruction of millions of pounds’ worth of pensions. But the nits at the FCA are far too busy knitting to take any action against these firms.

The FCA goon goes on to spout: “we would expect advisers should follow certain steps, ask certain questions and provide specific documentation when reviewing your personal situation and recommending something to you”. He then goes on to list a number of “steps” that should “generally be carried out” by advisers. But he forgets to mention that the unethical FCA-regulated transfer advisers will deliberately omit these steps. These rogue advisers may be relatively rare, but they will – between them – feed the majority of the scammers in the UK and offshore.

Of course, the subject of “contingent” charging has not reared its ugly head. The Federation of Consolidated Apathy is obviously expecting advisers to make a choice:
1. Advise to transfer and earn a fee or
2. Advise not to transfer and earn nothing
I expect ethical advisers will easily walk away empty handed – happy that they’ve done the right thing (and prevented a transfer to criminals). But that’s a bit like expecting that a regulator will do a bit of regulating between knitting sessions. There are, of course, plenty of decent advisers in the UK – but their reputation is called into question because of the few FCA-regulated snorters.

Finally, after a load of excrutiatingly boring waffle about what the FCA “expects”, Goold gets to the most important question of all:

“Did the adviser explain that the employer scheme provides a guaranteed income in retirement? Did they explain that, if you transfer, you may run out of money. You may live longer than your pension does?” – how would you feel about that?

Goold clearly comes from the planet Zogolob. And he really ought to go back there asap before he poses any more daft questions such as: “How would you feel about running out of money?”. What the hell does he expect a client to say: “Fine, thank you. I can just print some more if I need it. Or if the money printer is out of ink, I’ll just go pick some from the money tree”. Beam me up Scottie FFS!

This moron then goes on to raise the very issue that the scammers use to dupe their victims: CONTROL. The criminals of the financial services world use “control” as a powerful weapon to seduce clients into transferring their DB pensions – not so the member can have control but so the adviser has control.

Having passed control of the pension over to an unscrupulous – and often criminal – adviser, the rogue FCA-regulated transfer sign-off then facilitates a number of fatal steps which will guarantee the destruction of the fund. And, inevitably, will guarantee that the victim will run out of money.

There are two types of crimes that then follow – depending on whether the victim is in the UK or offshore.

Arguably, if the victim is based in the UK there may be less risk and more protection. But you can ask the many thousands of scam victims who have lost their life savings as to whether this is true. The answer is likely to be that the actual protection is slightly less than an ashtray on a twist’n go.

The Goold twerp should have asked not just the British Steelworkers but also the victims of the London Quantum scam; the Berkeley Burke, James Hay and Suffolk Life SIPPS scams; Ark; Capita Oak; Westminster; STM Fidecs/Trafalgar Multi Asset fund; Integrated Capabilities/Blackmore Global fund; GFS/Blackmore Global and dozens more. But, of course, he didn’t bother.

These UK-based victims saw their funds being transferred to bogus occupational schemes or negligent SIPPS and QROPS providers. The money was then destroyed by being invested in worthless assets – such as store pods, car parking spaces, derelict German buildings, collapsible flats in Cape Verde and mouldy chia seeds.

Offshore victims fare even worse in the hands of rogue commission-hungry scammers:
1. The fund will be under the full control of a rogue “adviser” who could well be unqualified – and whose only mission is to rinse commissions out of the victim’s retirement money
2. This adviser could well be with a firm which only has an insurance license (if it has any license at all) – so any investments made by the firm will have zero regulatory protection
3. The funds will then be transferred to a QROPS. And the degree of regulatory observance by the QROPS provider will depend on the jurisdiction. Malta is now getting its act together, but Gibraltar still has no ombudsman or arbiter. And seems to actively encourage scams and scammers. A QROPS may be entirely the wrong vehicle and a low-cost, UK-based SIPPS could be a much better solution. However, leaving the pension where it was would, undoubtedly, have been the best choice (but wouldn’t have earned the scammers any commissions).
4. The scammer, now fully in control of the victim’s life savings, will transfer the whole lot into an insurance “bond” with a rogue firm such as Old Mutual International, Friends Provident International, RL360 or Hansard. This will earn the scammer 8% on the amount invested – and could lock the victim in to this arrangement for up to ten years. The scammer will ignore the fact that he is committing a fraud.
5. The “bond” provider will now claw back the commission paid to the scammer over the term of the contract – plus, of course, the life office’s own commission.
6. The life office (Old Mutual, Friends Provident etc) will then offer the victim, and his scammer who now has total control over how the fund is invested, a selection of high-risk, expensive funds and structured notes which will pay the scammer further fat commissions. Many of these funds – such as Axiom, Premier New Earth, Mansion Student Accommodation etc will fail and become worthless. The high-risk structured notes – such as Commerzbank, Royal Bank of Canada, Nomura and Leonteq – will destroy most (if not all) of the victims’ funds.
7. The scammer will lie to the victim and say that the “bond” is necessary for tax efficiency. This, of course, is untrue since there are only any tax savings if the fund makes a profit – which it won’t.
Goold goes on to mention that “Having more control over your pension money may be important to you but if you have to transfer your pension fund to enable you to do it, it may impact on your family and lifestyle.”

Being obviously clueless, this moron forgets to mention that many of the victims of the devastating “impact” on their family and lifestyle are dying. They are devastated by the loss of their valuable pensions and are facing a wretched, poverty-stricken retirement. Many are considering suicide. Some have already taken their own lives or died miserable deaths caused by stress.

Goold plumbs new depths by claiming that the FCA “would also expect advisers to carry out a detailed comparison of the benefits available in the employers’ pension scheme against the benefits available in any proposed new arrangements”. But he clearly hasn’t bothered to find out what the devastating consequences of the “new arrangements” are likely to be.

Goold has also failed to mention that some of the transfer advice is given with only one single aim: to earn commission on the fund value. The advice is almost always “yes, go ahead and transfer” – irrespective of whether it is obviously not in the victim’s interests.

An example of this is Stephen Ward of Premier Pension Solutions who signed off many hundreds of DB pension transfers knowing full well that he was condemning the victim to certain death at the hands of the scammers who would gain control of the fund and would inevitably destroy it.

There is no possible argument that Ward did not know how the victims’ funds were going to be invested – because he himself was doing the very same thing to his own clients.

In fact, the tactic is now changing so that the standard DB transfer advice is routinely “DON’T TRANSFER – IT IS NOT IN YOUR INTERESTS”. The victims are carefully prepared for this and are classified as “insistent” – so the transfer goes ahead anyway.

Finally, Goold commits the ultimate in offensive indecency and suggests that victims should ask: “What are the death benefits available within the employers’ pension scheme against what are the death benefits available in any proposed new arrangement?”

This cretin should have asked me before committing such a vile gaff. I could have referred him to the case of one of the Continental Wealth Management victims – whose £415,000 Shell DB pension fund was totally destroyed. The stress of facing poverty killed him in July 2019. He had not one single penny left. His ex wife had to pay for his funeral.

FCA morons such as Goold should not talk about “death benefits”. Goold, and his expensive boss Andrew Bailey, should try talking to the pension scam victims so that they understand just how dreadfully the FCA has failed the public.
September 9, 2019
Who killed the pension? Scammers; ceding providers; introducers; HMRC?

In every pension scam there is one beginning, lots of middles, and always a wretched ending for the victim and a profitable ending for the scammers. The beginning is always a negligent, lazy, box-ticking transfer by a ceding provider – the worst of which always tend to be the likes of Standard Life, Prudential, Scottish Widows, Aviva, Scottish Life, Aegon, Zurich etc.

Pension scams are rarely simple and there are many different culprits to blame for the losses. The one common theme though, is that not one of the parties involved is prepared to take the blame for the victims’ losses – EVER. It was always someone else’s fault.

The pension scam trail is rather like a game of Cluedo. The question is: “who murdered the pension fund?”. We travel around the board trying to decipher who is to blame: at which point was the pension fund truly put at risk? – and with what weapon was the pension fund murdered?

While the pension fund transfer always starts with the negligent ceding provider, there are financial crime facilitators long before this: our old friends HMRC and the Pensions Regulator. HMRC registers the scams – often to repeat, known scammers. HMRC does no basic due diligence and deliberately ignores obvious signs that the scheme is an out and out scam. Then HMRC does nothing to warn the public when they discover there are dastardly deeds afoot. In the case of an occupational scheme, the Pensions Regulator allows the scheme to be registered and is slow to take any action even when obvious signs of financial crime emerge.

In recent cases, we have seen complaints – by the victims of scams – upheld against the ceding provider’s negligence in releasing the pension funds to the scammers and financial crime facilitators. And yet neither HMRC nor the Pensions Regulator is ever brought to account. The biggest problem is that – in the case of pension liberation – HMRC will pursue the victims and not the perpetrators. This then compounds the appalling damage done to thousands of people’s life savings.

We have often seen serial scammers like Stephen Ward behind scams such as Ark, Capita Oak, Westminster, London Quantum etc., and yet neither HMRC nor tPR take any action (except to pursue the victims for unauthorised payment tax charges). This is neither just nor reasonable – and yet this practice continues unchallenged.

Any half-decent detective would then turn his attention to the “introducers” and cold callers. These people draw in the victims with unrealistic promises of fat returns and “free” pension reviews. In the case of the London Capital & Finance investment scam, we have seen hard evidence of how lucrative introducing and lead generation has become. Surge Group earned over £50 million promoting the scam which saw 12,000 victims lose £236 million worth of life savings. Surge boasts that it has over 100 staff and that they are treated very well: “We have our own in-house Barista who makes the best flat whites in Brighton. Every day you will find healthy breakfasts, fridges brimming with drinks and snacks, weekly massages and haircuts provided onsite.”

In the case of the Continental Wealth Management scam, there was a further trio of suspects: life assurance companies – Generali and SEB and OMI. These providers of expensive “life bonds” pay the scammers 7% commission and facilitate the crime of defrauding victims into investing into high-risk, expensive, unsuitable investments that earn the scammers further fat commissions. Even when the portfolios have been partially or even fully destroyed (murdered), the life offices still take the huge fees and blame the advisers such as CWM – or even the victims themselves.

We also have the so-called regulators – such as the FCA (Facilitating Crime Agency) and tPR (the Pension Rogues), who are supposed to help protect the public from becoming pension scam victims. But these limp and lazy organisations are so slow off the mark, that the scammers have long since vanished by the time they take any action. This is evident in the recent London Capital and Finance investment scam; the FCA was warned back in 2015 but – of course – did nothing.

Another suspect in the pension murder crime scene is the Insolvency Service. Back in May 2015, the Insolvency Service published their witness statement in the case of a large cluster of pension scams – including Capita Oak, Henley Retirement Benefits, Berkeley Burke and Careys SIPPS – all invested in Store First store pods. The total scammed out of 1,200 victims was £120 million – and yet the only action that the Insolvency Service has taken has been to try to wind up Store First. Four years later. And all this will do is punish the victims even further – on top of HMRC punishing the victims by issuing tax demands.

The burning question is:

How long can all the parties involved in these pension scams, go on letting this happen and say it has nothing to do with them? In some cases we have the ceding providers blaming the victims for their losses!

Still, to this day, we see victims’ life savings invested in toxic and expensive assets. Nothing meaningful is being done to put a stop to it. The victims lose their money and the scammers escape with bulging pockets full of cash.

Other suspects include the advisory firms – some of which have no license to provide financial advice and few have sufficient professional indemnity insurance. Henry Tapper recently wrote an interesting blog recently about the FCA’s suggestion that financial advisory firms should have much higher PI cover.

In the offshore advisory space, regulation is still hit and miss – with some firms providing investment advice with only an insurance license. And many providing advice with no license at all. But still QROPS and SIPP trustees routinely accept business from these “chiringuitos”. But even the properly-regulated ones still routinely use expensive, unnecessary “life” bonds – and we now have hard evidence that this is a criminal matter in Spain after our recent DGS ruling against Continental Wealth Management and all associated parties.

The saddest footnote to this blog is that many so-called “experts” seem to think that the real culprit is the victim himself. They state that people who fall for scams were “stupid” or “greedy” or “should have known better. The well-worn trite phrase: “if it sounds too good to be true, it probably is” gets trotted out all too frequently. But when even regulated and qualified firms and individuals have convincing sales patters that effectively con people into expensive, high-risk arrangements with hidden commissions and fake promises of “healthy” returns, is it any wonder that so many pensions are murdered every day? And when large institutions like Old Mutual International and Friends Provident International facilitate such pension and investment scams, is it any wonder that so many highly-intelligent, well-educated people get scammed?

Ask the victims of not just the £236,000,000 London Capital & Finance fund (bond), but also:

Axiom Legal Financing Fund – £120,000,000 (most of which offered by OMI and Friends Provident International)

LM Group of Funds – £456,000,000 (most of which offered by OMI and Friends Provident International)

Premier Group of Funds – £207,000,000 (most of which offered by OMI and Friends Provident International) – including Premier New Earth and Premier Eco Resources

Leonteq structured notes – £94,000,000 (all of which offered by OMI)

April 1, 2019
London Capital & Finance collapses

Another high-risk investment fund goes belly up. London Capital & Finance (LCF) has gone into administration, not long after taking a whopping £236m of investments – much of which was from first-time investors. It is thought that 12,000 investors have been financially ruined.

This tragic news comes as plans are being drawn up to take recovery action for the victims of three other failed funds: Axiom with £120m worth of investors’ funds (£30m of which was with life offices FPI and OMI); LM £456m (£90m with FPI and OMI); and Premier New Earth £207m (£62m with FPI and OMI).

With so many millions having been lost between LCF, Axiom, LM and NERR – well over one billion pounds – this does beg the question as to when regulators are going to take some effective action to restrict the promotion of such funds to retail investors. Because, without the active and highly-efficient marketing machine which operates so successfully in so many jurisdictions, these no-hoper funds would never get off the ground. But, of course, they pay fat commissions to the introducers and brokers who peddle them. So, obviously, exposing naive-investor clients to high-risk funds was very profitable.

This also begs the question as to why the success of such dreadful funds continues to flourish – and why trustees and life offices continue to offer/accept them. Certainly, life offices have a great deal to answer for when it comes to doing due diligence on start-up funds with no decent provenance or evidence that they have even the tiniest chance of succeeding.

The London Capital & Finance investment bond was touted as a “Fixed-Rate ISA”, with promises of 8% returns over a fixed term of three years. BBC News reported on the collapse and stated that “Administrators said investors could get as little as 20% of their money back.” Read the full report.

What is interesting in this case, is that the promoters – a Brighton-based firm called Surge PLC – are the same marketing firm that Blackmore Global used to promote their very expensive Blackmore Global Bond. Another high-risk and expensive investment bond, that up until recently failed to be transparent about the costs involved in the investment.

It is thought that LCF paid Surge PLC some £60m to run their marketing campaign, which amounts to a commission of about 25%! Surge ran a series of marketing campaigns comparing the bonds from LCF to high-street bonds, promising consumers an 8% return. Comparison websites put LCF at the top of the retail market for bond investments and did not highlight the high risk of the bond.

These ads were pulled by the FCA, due to LCF being regulated and authorised to provide consumer financial advice ONLY. They were not regulated for the sale of bonds or ISAs. It has also been found that the comparison websites were not independent, but rather had a connection to Surge PLC and are also owned by Paul Careless – we have mentioned Paul Careless in other blogs: he is the Director of Surge PLC and seems to be one of the only parties involved in these high-risk investments to be making any profits!

As with so many high-risk unregulated investments like this, the age-old question is, “Where did the money invested into LCF´s bond go?”

We know that LCF paid Surge that huge commission fee, and this then meant returns of up to 44% would be required in order for LCF to make good on its promises. Even in a great investment, this is an unbelievably high return and totally unrealistic.

Once the investments had been completed, the money was then ‘loaned’ out to twelve other companies, and some of these companies then sub-loaned the money. There are concerns that the companies who received these ‘loans’ have a connection to the directors of London Capital & Finance. Many of the firms were very new and four of them have never filed any accounts!

Michael Andrew Thomson, known as Andy Thomson, took over as the boss of LCF in 2015 and is also director of horse riding company GT Eventing. He and Careless are under investigation over the mis-selling of this bond and their connection to the other companies invested in. However, Careless claims he has only carried out marketing practices that were requested of him and his 25% commission fee is in line with market averages.

BBC News spoke to Neil Liversidge – an IFA who came across the scheme back in 2015 and consequently wrote to the FCA to warn them about the connections and possible mis-selling of the investment.

Mr Liversidge said: “The way it was promoted, a great many people could have fallen for this. A client brought it to us, but when we looked into it there was a lot of interconnection between the people they were lending to and the management of LCF themselves. We warned our clients off and the same day we wrote to the regulator raising our concerns about the promotion.”

Mr Liversidge, of course, was proved to be absolutely right. But, unfortunately, it took the FCA a further three years to shut the bond down, which ended up with 11,605 victims investing £236m in LCF’s bond. Investigations show that recovery is likely to be as low as 20% of the initial investments made.

Whilst the investigation goes forward, there have been no promises of compensation from the Financial Services Compensation Scheme (FSCS).

BBC News reported:

“The FCA findings included that LCF’s bonds did not qualify to be held in an ISA account and therefore investors were being misled by being told the interest they earned would be tax free.

The FCA said it was “unlikely” investors of London City & Finance would be protected under the Financial Services Compensation Scheme (FSCS) but it was “for the FSCS to determine”.”

Yet again we see unregulated investments being mis-marketed, to innocent retail investors – and the high risks being masked by promises of high returns. With high commissions – also masked – lining the pockets of the introducers, these toxic investments only make those who receive the commissions any profit. The victims, again and again, lose their hard-earned savings and there is little that they can do to recover them without expensive litigation.

For more on this story listen to BBC Moneybox by clicking here.

March 21, 2019
Death of the Life Bond (Life of the Death Bond?)
Attention financial advisers in Spain/who provide financial advice to Spanish residents.

18^th February 2019

DEATH OF THE LIFE BOND:

The Spanish insurance and pensions regulator, the DGS, made a judgment against Costa Blanca-based Continental Wealth Management (CWM) on 10.1.2019. The order (translated and summarised below) confirmed that there are strict regulations in Spain for the sale of insurance products. The DGS also made it clear that even if a firm is not regulated in Spain by the DGS, it must conform to the Spanish regulations.

The deadline for compliance with the order was Monday 11^th February. Unsurprisingly, CWM failed to comply. CWM had collapsed in September 2017 and all the scammers who worked for the firm headed for the hills (or Australia). We are now enforcing this order by criminal action against all those responsible. This also opens the way for similar action against any other firms who have mis-sold insurance products without complying with the Spanish regulations.

In certain, limited circumstances, insurance bonds can be beneficial. But in the vast majority of cases they are entirely mis-sold, and the underlying commissions concealed. These hidden commissions prevent the funds from growing and have an ever-increasing detrimental effect on the value of the fund. I have seen evidence of an entire fund being destroyed by irresponsible, risky, commission-laden investments. The life offices (such as OMI, SEB, FPI, RL360 and Generali) continue to apply their quarterly charges while the funds are being destroyed – sometimes even pushing the funds into negative territory.

Why should the use of life bonds be strictly controlled?

I have transcribed the DGS’ judgment below. It is an abbreviated, translated version of the original. I also set out below the reasons why life bonds should now be strictly controlled and only sold/advised by qualified, regulated firms. Once an international standards agreement has been established, it should be possible to ensure that only those firms who understand how to use these products properly will use them in future.

I hope that all advisers providing insurance advice in Spain – and beyond – will now ensure that losses caused by the mis-selling of life bonds are put right. I also hope that this policy will be adopted throughout Europe and in all other jurisdictions so that the worldwide mis-selling scandal can finally be ended.

There will be criminal proceedings – and these will extend to the life offices themselves for profiting from financial crime. The many victims whose life savings have been destroyed by the life offices and their toxic practices will welcome this news. The victims themselves know intimately the numerous faults of the life offices:
- accepting business from (and paying undisclosed commissions to) known scammers and unregulated advisory firms
- offering high-risk, unregulated funds such as Axiom, LM, Premier New Earth and other no-hoper funds
- offering professional-investor-only structured notes from providers such as Leonteq, Commerzbank and Nomura
- reporting the inexorable losses but taking no remedial action
- locking victims into the expensive, pointless bonds long after the majority of the funds had been destroyed
This latest development with the DGS judgment will help the victims take action against negligent life offices such as Old Mutual International and Friends Provident International. This will be a powerful weapon in the recovery process against these parasitic, negligent and greedy insurance companies.

I set out below, in red, reasons why insurance bonds should now be strictly controlled internationally. This is not just my opinion – but an order by the Spanish government. In my view, this is a very sensible and useful order which is in the interests of all consumers throughout Europe and the wider world.

Decent, ethical, regulated firms will comply with the DGS’ judgment. The scammers will not.

——————————————————————————————————————————————————

Madrid, 10 January 2019 – Complaints service file number 268/2016

Chief Inspector of Unit – Ministry of Economy and Enterprise

Secretary of State for the Economy and Business Support

General Directorate of Insurance and Pension Funds (DGS)

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

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

The scammers do not, of course, comply with this regulation. In fact, scammers rarely tell their clients that they are going to be put into an insurance bond. Unscrupulous advisers often conceal how the bond will work or for how many years they will be locked in for. Normally, scammers wave an agreement for an OMI, SEB, Generali, FPI or RL360 bond under the nose of the clients – and ask them to sign the agreement with no explanation. Rarely do the scammers allow the client to read the document properly, or disclose the commission they will receive from selling the often pointless bond.

Victims will be locked into the bond long after they have worked out that the adviser has mis-sold the product purely for the 8% commission – and that the charges will prevent the fund from ever growing. In fact, even if the underlying asset were to perform reasonably well, it would struggle to keep up with the combination of the bond and adviser costs.

It is rarely explained that the bond is a bogus life assurance policy (or series of policies); that any life cover is only actually 101% of the original value of the funds the victim has unwittingly placed into the bond. If all the clients had wanted was life cover in the first place, this product would represent terrible value for money. The Spanish Supreme Court has already ruled that life assurance policies are void for the purpose of holding investments – because the life office takes no risk.

Therefore, the life bond fails on three counts:
1. it is a useless life assurance policy
2. it is a useless investment platform
3. it does not comply with Spanish regulations.
I could go on: the life bond is expensive; fails to disclose adviser commissions; offers high-risk, unregulated funds; accepts business from known scammers and unregulated firms; allows professional-investor-only structured notes for retail investors. The list is endless.

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

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

If the client had stipulated that he needed a life assurance policy (which he usually didn’t), the adviser should have explained fully how and why any product offered fitted the client’s needs. This virtually never happens. The adviser has already decided (long before he has even met the client – let alone carried out a fact find) – that he is going to flog him a bond from whichever life company is paying the highest commission. And this is how so many victims end up with useless insurance products from OMI, SEB, Generali, RL360, Friends Provident International, Hansard, Investors Trust etc.

Even if the client had specifically asked for – say – £100,000 worth of life cover, these “life” policies could never guarantee to provide that cover. In a proper, bona fide life assurance contract (where the client pays a monthly premium for the life of the policy) the pay-out is guaranteed. In these bogus life assurance policies, the value of the pay-out inevitably decreases as the charges eat into the fund. This is normally the case when disproportionately risky investments are made by the life offices.

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

“Before an insurance contract is concluded, the insurance intermediary must, as a minimum, provide the customer with the following information:
1. a) The broker’s identity and address.
2. b) The Register in which the broker is registered, as well as the means of verifying such registration.”
This rarely happens in practice – unless the broker is one of the very few professional and ethical firms in the expat world. An adviser might claim to be based in one jurisdiction, but could – in fact – be based in an entirely different one. “Passporting” is often misused as advisers “fly in under the radar” and provide advice in jurisdictions where they have no legal right to operate.

Insurance agents must inform the customer of the names of the insurance companies with which they can carry out the mediation activity in the insurance product offered.

Agents often have terms of business with more than one life office – but will rarely disclose the fact that some or all of them have a long history of facilitating financial crime internationally.

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

I have never seen an instance of this happening – which is not to say it doesn’t happen. Just that I haven’t seen it. But then people don’t come to me when things are going swimmingly – they only come when they have lost some, most or all of their fund.

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

And herein lies the problem: the advice is rarely provided for the purpose of taking out an insurance policy – the advice is usually given because the client wants his pension or life savings invested safely, prudently and profitably. Few – if any – clients come to the adviser to ask for a life assurance policy. But they get one, whether they need it – or can afford it – or not.

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

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

I have never seen an example of an adviser offering a client a selection of possible insurance contracts. The adviser has normally decided which life product he is going to flog long before the client even walks through the door. In a normal insurance contract relationship, it is the insurer which takes the risk. But in life bond contracts, it is the insured who takes the risk – i.e. that his life cover will be substantially lower than that originally contracted and that, indeed, his fund will be severely impaired by the costs of the contract.

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

I have never seen this happen – which is not to say that it doesn’t happen. But the adviser could only explain to the customer that the sole purpose of the life bond is to pay him 8% commission. And that would inevitably spook the customer – so the adviser doesn’t bother. There will surely be all sorts of flim-flam about the life bond allegedly providing tax efficiency. However, any real tax savings will be resoundingly eclipsed by the high charges.

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

I have never seen a single instance of an intermediary complying with the DGS rules in Spain or anywhere else. But that is because I only ever hear about cases where the clients suffer losses. The people who are well looked after by competent, professional, ethical brokers never bother contacting me – because they don’t need to! However, I would love to hear from advisers who do abide by the rules.

Every insurance intermediary is obliged, before the conclusion of the insurance contract, to provide full disclosure.

Never happens in my experience. The commission is normally concealed, and the inflexibility of the lock-in period is rarely explained. The victims usually only find this out after they have realised they have been scammed.

In the event that a mediator was an Insurance Broker or independent mediator, he is also obliged to give advice in accordance with the obligation to carry out an objective analysis.

Never happens in my experience. The adviser/mediator doesn’t use the life assurance product for life assurance, but as a bogus “wrapper” for holding investments. Therefore, the likely outcome of any objective analysis is very unlikely ever to be fulfilled.

This must be provided on the basis of the analysis of a sufficient number of insurance contracts offered on the market for the risks to be covered. The mediator can then formulate a recommendation, using professional criteria, in respect of the insurance contract that would be appropriate to the needs of the client.

I have never seen an instance of a mediator offering a selection of possible contracts – and there are no risks to be covered, as the insurer takes no risks. This is why these products have been deemed by the Spanish Supreme Court to be invalid. However, if a mediator were to offer a “selection” of life bonds, they would all be identical as they are all just as bad as each other.

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

As it has in just about every instance I have ever seen in Spain – and beyond. In fact, one firm in Spain – Blevins Franks – only offers one insurance product and that is Lombard. This is completely illegal.

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

I have never seen an instance of any firm complying with the obligations imposed by law in Spain. That doesn’t mean it doesn’t happen – and I would love to hear from firms who do comply with this law so that my knowledge can be broadened. However, if this does happen, it is only likely to be in the case of ethical firms, and they are unlikely to use these bogus life assurance policies anyway.

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

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

The entity – Continental Wealth Management – did not, indeed, comply with the DGS’ requirement. This now gives the green light for this firm and the directors and shadow directors associated with it – as well as the life office which was complicit in this scam – to be subject to criminal proceedings. The life offices, in this case, were complicit as they were effectively profiting from financial crime.

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

THE DEATH OF THE LIFE BOND

I think it would be no understatement to say that this heralds the end of the mis-use and abuse of life bonds (also known as portfolio bonds or insurance bonds). Not just in Spain, but throughout Europe and beyond. This will be warmly welcomed by the thousands of victims who have lost their life savings to rogue insurance companies such as OMI, SEB, FPI and Generali, and unregulated scammers such as Continental Wealth Management.

The ethical sector of the financial advice industry will, of course, be delighted – and there will be a mad scramble by the rogues to find a way round this ruling. And they will fail.
February 18, 2019
International Adviser – Giraffe Awards

Looking at International Adviser’s 2017 awards, I really think the judges were having a giraffe (or they were very drunk).

“Best regular premium investment product – Hong Kong – Zurich International Life”

Seriously? This grim firm has one of the most expensive long-term savings plans on the market. A victim scammed into buying one of these toxic, inflexible products will pay 48.07% of their savings in fees to Zurich. To put this into real numbers, a victim who saves £366,600 over a 25-year period, will pay £176,240 in fees.

In this disgraceful long-term rip-off contest, Zurich is in the midst of the others who similarly overcharge their victims with these undisclosed charges: RL360 at 51.68%, Hansard at 51.28%, Generali at 47.08% and Friends Provident at 46.64%. Savers would be better off sticking their savings under the mattress, away from the greedy clutches of these rip-off merchants.

“Best regular premium investment product – Singapore – Friends Provident International”

OK, perhaps the least expensive of the big five, but still 46.64% is ludicrously expensive. These long-term savings plans are routinely mis-sold and victims end up losing most of what they have saved.

“Readers choice – Europe – SEB International”

This life office was routinely ripping off pension savers by taking business from unlicensed, unqualified, unscrupulous scammers Continental Wealth Management from 2010 to 2017. To the tune of 1,000 victims with £100 million worth of investments. About half of which has been destroyed. SEB stood by and watched CWM invest hundreds of victims’ life savings in toxic, high-risk, professional-investor-only structured notes. As the scammers gambled away millions of pounds, SEB kept taking their fees – based on the original investment value. In this case, all of SEB’s victims lost part or all of their retirement funds.

I HAVE DECIDED TO INVITE MY FRIENDS AT INTERNATIONAL ADVISER TO LAUNCH A NEW AWARDS CEREMONY:

THE GIRAFFE AWARDS

My proposal is that awards are given every year for the worst performers in terms of either operating scams or facilitating them. Let us be very clear – we are talking about financial crime here. It is extremely important that publications such as International Adviser do their bit in cleaning up the financial services industry. That is why these awards are so important.

The judges should be the victims themselves. Here are my nominations – but am more than happy for victims to suggest others:

Advisory Firms: Continental Wealth Management, Holborn Assets

Pension Trustees: Concept, STM Fidecs, Fast Pensions

Life Offices: SEB, Generali, Hansard

Funds: Blackmore Global, Trafalgar Multi-Asset, Christianson Property Capital

Structured Product Providers: Leonteq, Nomura, RBC, Commerzbank

Regulators: Isle of Man, New Zealand, United Kingdom

It is clear that regulators and ombudsmen are useless, limp and disinterested in how their respective jurisdictions operate financial crime so routinely. International Adviser could emerge the hero by exposing the appalling practices in offshore financial services which routinely destroy victims’ retirement savings. (Or not, as the case may be).

May 28, 2018