Tag: Investment Scam

TICKING TAX TIME BOMB ON LIFE SAVINGS

Welcome to my world – and the four letter word that sends a chill down most people’s spine: HMRC. A world where justice and taxation are not just in different countries, but on different continents. And, sadly, where thousands of British expats are living under the shadow of a ticking time bomb because of arrangements made with their pensions and life savings.

A few people are aware of the tax disaster that awaits them. But the majority have absolutely no idea and it is going to hit them as a devastating shock – whether from HMRC or their local tax authorities (or, in some cases, both).

Up to 2012, expats were routinely sending their pensions off to New Zealand – to the Superlife and Southern Star QROPS – and then busting 100% out. After the rules changed in April 2012, Stephen Ward set up the Evergreen QROPS/Marazion loan scam and up to 300 people bust 50% of their pensions out. It remains to be seen how the Spanish tax authorities will treat all these payments. It is unlikely to be pleasant for those affected.

For expats in Spain, the outlook can be grim. If there is a debt with HMRC for tax – say an unauthorised pension payment @ 55% – HMRC can send the debt to the Spanish Tributaria and they can then enforce the payment. If we think that HMRC is heartless, the Tributaria makes them look like the Sally Army. If a tax debt is unpaid, they will just have your bank account frozen and can also put your house up for auction.

In the Continental Wealth Management scam, large numbers of victims were paid compensation for the destruction of their pension funds by investing them in high-risk, toxic structured notes from firms such as Leonteq. But CWM had not bargained for the fact that in Spain the Tributaria would deem this to be taxable income – and the victims had a terrible surprise when the money they had used up to live on attracted a hefty tax bill for which they hadn’t budgeted.

Which brings me to Portfolio Bonds in general – and the SEB Life International “Spanish” one in particular. Many victims are fooled into thinking that because this product is heralded as “Spanish Compliant” that there is some degree of safety or security. There isn’t. SEB’s Spanish Portfolio bond is compliant from the Tributaria’s point of view because it reports annually on growth of the portfolio for tax purposes. However, that is all there is to it. And it is a waste of time anyway, because there often isn’t any growth – only loss. The huge quarterly charges by SEB erode any growth – and if toxic Leonteq structured notes have been used, there will be destruction of most or even all of the fund.

The Continental Wealth Management scandal – along with similar scams run by firms such as Holborn Assets – should have taught the industry conclusively that insurance bonds should not be used for pensions. They are too expensive and inflexible. The quarterly charges do increase when the fund value increases, but they don’t decrease when the fund is impaired – or even destroyed entirely. I have one member whose fund has gone from £250k to minus £57k as SEB simply kept taking their fees long after the fund was worthless.

An insurance bond (Personalised Portfolio Bond) can be used by an individual as an investment wrapper outside of the UK. This can be useful and tax efficient offshore. But when the investor goes back to the UK, there is a tax nightmare. Personalised Portfolio Bonds come under anti-avoidance legislation in the UK!

The horrible surprise that the investor will get upon returning to British soil is that HMRC can assume a deemed gain even if there is no gain at all, and charge tax on it. It is known often as the 15/15/15 rule and it leads to taxation even where the fund within the bond is losing money.

This situation only applies to investments within the Personalised Portfolio Bonds, selected by the policyholder, where the policyholder is a UK tax resident. The tax payable is at the policyholder’s highest rate. Even worse, the supposed tax efficiency of investment bonds does not work as top slicing relief (which normally lessens the blow and is often the cited reason for these bonds when sold to non-UK investors) does not apply to Personalised Portfolio Bonds.

Most people assume that tax is applied to actual gains made by the overall fund. And few offshore advisers have heard of the tax rules which apply in this situation (The Income Tax, Trading and other Income Act (ITTOIA) 2005 Sections 515 to 526). The devasting effect of this on an expat returning home is that the rules assume an annual gain of 15% of both the initial premium and the cumulative actual gains from the date the bond was established.

My friends at International Adviser published an article about this, by Chris Lean of TailorMade Pensions last month.

What is a Pension Scam?

May 27, 2018
SEB – NO TRUST – NO RESPECT – NO EXCUSE

SEB – NO TRUST – NO RESPECT – NO EXCUSE. SEB’s many victims have no trust or respect for this disgraceful firm which has failed them so dismally. There has been no excuse for SEB’s appalling behaviour – and now is the time for SEB to put the damage right.

This week, SEB had the gall to write to its many victims as below:

From: <no-reply@seb.ie>
Date: 22 de mayo de 2018, 17:03:52 CEST
To: <SEBvictim@yahoo.co.uk>
Subject: Important information regarding the General Data Protection Regulation

Dear client,

We respect the trust you place in us when you share your information with us. So we are letting you know about improvements to how we use, store and share the information we hold about you.

The European Union is introducing new legislation, the General Data Protection Regulation (GDPR), which comes into effect on 25^th May 2018. GDPR significantly changes data protection law in Europe.

Yours sincerely,

Orla Golden
Operations Manager SEB Life International

Phone: +353 1 487 0700

Trust? Respect? Is Orla Golden having an 18-carat laugh? Does he truly think that a single one of SEB’s victims gives a damn about their “information”? Doesn’t he think that, actually, all SEB’s victims would love to share the information that they have been ripped off, conned and scammed by SEB? And that while their life savings continue to dwindle away to nothing, SEB is continuing to charge extortionate quarterly fees?

The European Union should ban scammers like SEB (and Generali) from operating in Spain and the whole of Europe. SEB is a disgusting parasite and brings the whole of the financial services industry into disrepute. SEB took business from an unlicensed firm of known scammers (Continental Wealth Management) and then sat back and watched while toxic structured notes destroyed hundreds of victims’ life savings. And did NOTHING.

Who at SEB is responsible for the travesty of the destruction of hundreds of victims of the Continental Wealth Management scam? And the terrible stress these people are going through? This guy:

https://www.linkedin.com/in/conor-j-mccarthy-8419263/

Conor J. McCarthy. And his email address is conor.mccarthy@seb.ie

His Linkedin profile claims that he is European Sales Director with responsibility for Intermediary sales with SEB Life International. That means that he was responsible for accepting business from Continental Wealth Management and for the destruction of millions of pounds’ worth of life savings. He took millions of pounds worth of business from an unlicensed firm of known scammers and accepted investments in toxic, high-risk structured notes – including the fraudulent Leonteq ones – knowing full well that the victims were low/medium risk pension savers.

Mr. McCarthy also claims that: “As a qualified financial adviser (QFA) I have a keen understanding of financial planning and investment needs of international clients. As a marketing graduate, I try to communicate in such a way that it all makes sense to clients.” I really don’t think that any of SEB’s victims have any trouble understanding the communications that reported their losses.

As a marketing graduate, Mr. McCarthy should understand that the best way to “market” a company is to compensate the victims without them having to sue SEB.

The managing director of SEB is Peder Nateus and I assume his email address must be peder.nateus@seb.ie

So let us all share our information about SEB’s sickening behaviour and tell the European Union what we all think about SEB as publicly as possible.

May 25, 2018
Old Mutual International (OMI) facilitating financial crime

From 2010 up to the present day, Old Mutual International has been facilitating financial crime by allowing scammers to misuse and abuse OMI “life bonds” to scam victims out of their life savings.

The victims of the CWM scam are still wondering how the hell they lost an average of 60% of their life savings. Old Mutual International (Quilter) was the provider for the bulk of the life bonds used in the CWM debacle, taking huge amounts of business from unregulated scammers Continental Wealth Management. OMI also paid CWM huge amounts of commission – in the full knowledge that CWM was unregulated and a known, serial scammer.

Pension Life members of the CWM victim group have supplied their figures to us. The losses are huge and we believe that these figures need to be shared with the public so Old Mutual International (OMI) understand and take responsibility for the devastation they have facilitated to the lives of the victims.

Let us hope that Old Mutual International will step up to the plate. The people who work at OMI are human beings, with loved ones. Hopefully, they can imagine how they would feel if this tragedy had happened to one of their loved ones – while the people at OMI stood by and did nothing to stop the devastation. For more than eight years, OMI employees sat on their hands while the so-called investments inside their “insurance bonds” plummeted in value. And OMI did absolutely nothing. Just kept taking their quarterly fees.

OMI will, of course, try to say it was not their fault. That it was down to the advisers appointed by the victims. Or the trustees. Or both. Or the Boogeyman. OMI will claim that they had every right to sit there and watch millions of pounds worth of life savings being wiped off investors’ funds, while continuing to take out their huge quarterly fees.

I wonder how OMI/Quilter directors would feel if this happened to one of their loved ones. Or if someone they cared about had been drowning, and a crowd of people had stood by and watched them die. Because, make no mistake, there will be deaths as a result of this. And the people at OMI will have this on their conscience for the rest of their lives.

OMI’s victims have died. And more are dying. This industry is about people. Let us see if OMI cares about their fellow human beings. Because, so far, there is zero evidence that they give a toss.

May 23, 2018
International Investment interview with Pension Life´s Angie Brooks

International Investment interview with Angie Brooks, founder of Pension Life this week. This blog is written by Kim, Angie´s Assistant. Here´s the interview video which explains how Pension Life works to help victims of pension and investment scams. The interview also raises the question as to why pension and investment scams are so prolific – despite Angie’s hard work to bring them into the public eye – and bring scammers to justice.

As Angie states in the video, Pension Life was originally founded to help victims of the ARK pension scam with their tax liabilities. However, four years on and Pension Life has evolved. Angie is now involved in helping 34 different groups of victims of pension and investment scams. Angie regularly goes to the regulators and ombudsmen in different jurisdictions and makes complaints on their behalf.

Pension Life is based in Spain, and Angie works with clients all over the world. Pension and investment scammers have no boundaries or borders and will weave their evil mischief wherever they can find British expats.

Angie offers her members a fixed membership fee, meaning “people know exactly what they are going to pay in advance”. Using privately-funded solicitors can be pricey and sometimes even non-starterer. Angie has, over the past four years, educated herself in pension and investment scams – how they work and how they are (constantly) evolving. Members can rest assured that they are being represented by a leading expert in the area of pension and investment scams.

If it were up to Angie, the people and firms responsible for pension and investment scams would all be sent to jail and the keys thrown away. With her weekly blogs and videos on the Pension Life website, and with the use of social media, Angie is hoping to get the word out there and warn both the public and the industry.

Angie stands up for the masses, where their single complaints are lost in a pile of excuses by the firms responsible for the destruction of their funds. She meets and speaks to as many victims as she can. Each victim has his or her own tragedy – often involving serious health issues and terrible financial hardship as a result of being scammed out of their life savings.

Some of Angie´s blogs are very hard hitting towards the firms and advisors who condone the use of pension and investment scams. The role Angie plays in uncovering the crooks of the industry is not without risk and often her outspoken words attract negative attention. Angie often receives threats of being sued by the lawyers who represent the companies she blogs about.

Angie states, “But If I was frightened I wouldn´t do it.”

Its not just solicitors who bombard her in outrage about the clearly-evidenced facts that Angie reports, she also has a herd of internet trolls who target her incessantly.

Angie says with reference to her blog trolls:

“There is a reason why I write my blogs. Firstly to warn the public and expose the things that go wrong in the financial services industry – to try to help new people avoid falling victim to scams, negligence and mis-selling; secondly to bring firms to the table to negotiate a solution to a problem where a client has suffered losses in their pension or investment portfolio. Few people have funds to instruct lawyers to sue firms to force them to pay redress for clients’ losses, so it is much better and cheaper to get the firm to volunteer to do so amicably and in a non-contentious manner.

But my blogs do upset the scammers and they regularly post negative comments. I have recently been accused of ‘being in cahoots with’ deVere and other companies and individuals. It is being claimed that I am being paid not to write about them, and to attack their competitors.  It will come as no surprise that those who are now attacking me and accusing me of all sorts of things are the ones whose firms’ questionable practices I have been blogging about recently.

I have in the past had very public spats on social media with deVere AND its CEO, Nigel Green, as well as the others who I have been accused of not writing about. And, if I need to have spats again in the future, I will not hesitate to do so. Like most firms, deVere has indeed made some serious mistakes in the past. However, I do not have any live, unresolved client complaints against the firm.

But this is all just rubbish from scammers who are trying to deflect attention from the main issues that I am writing about. The commenters ignore the facts I am reporting about – i.e. real scams which destroy victims’ life savings – and pick away at me personally. That is absolutely fine, because I am more than happy to be criticised and lied about – because it says more about the writer than it does about me. The people who matter know the truth.

Regular readers of my blogs may notice that sometimes my blogs quietly disappear with no public explanation. There is a reason for that too. The blogs often bring firms to the table and we get stuff done. Sometimes firms even preempt matters and make contact even before I get a chance to do a blog.

If I call a firm to discuss a problem and they enter into helpful and constructive dialogue over how to solve it, I don’t blog about it but keep the matter confidential. There are firms who quietly sort things out without making a fuss in a dignified and conscientious manner. In contrast, however, there are firms that just pull up the shutters – such as OMI and STM Fidecs. Hence why I keep blogging about them.

DeVere is indeed one of a number of firms I don’t currently blog about. So for the nice gentleman called Graham and another charming chap who calls himself “Innocent Bystander” who are accusing me of being partisan, don’t think just about what I do write, but about what I don’t write. There are good reasons for both.

I will continue to expose the actions, practices and vulgar conduct of firms who continue to ignore my questions; And I will tag all those who are stupid and irresponsible enough to keep on working for these firms and helping to fill these firms already bulging pockets.  In contrast, however, Holborn Assets and Guardian Wealth Management have engaged in relation to complaints, and so I have removed all blogs which mention the firm.”

For the future, Angie hopes things will get better and that the war on pension and investment scams can be won. However, much help is needed and Angie calls for the whole industry to get involved and make it their business to know what is happening to expats worldwide.

Airing the problem is one of the best solutions and International Investment has taken a keen interest in the campaigning side of what Pension Life does. It would be a really good thing if some of the media tried to educate themselves on what are the key issues and avoid barking up the wrong trees.

May 23, 2018
GENERALI WORLDWIDE – FINANCIAL CRIME FACILITATOR
Generali has responded to one of the complaints by CWM victims. I have transcribed it below and put my comments in bold.

First, let us look at what Generali says on its own website. It is utterly astonishing as it is a complete pack of lies and does nothing to prove it was not facilitating financial crime:

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

Our Vision: Our purpose is to actively protect and enhance people’s lives
- Actively: We play a proactive and leading role in improving people’s lives through insurance. This is untrue. Generali has neither been proactive nor played a leading role in improving people’s lives. It has taken no action to stop the scammers at CWM from destroying victims’ lives.
- Protect: We are dedicated to the heart of insurance – managing and mitigating risks of individuals and institutions. Totally untrue. Generali has neither managed nor mitigated victims’ risks. It has totally ignored the risks and simply stood by and watched hundreds of victims lose millions of pounds of their retirement savings.
- Enhance: Generali is also committed to creating value. What value? The only thing Generali is committed to is destroying value – and making money out of it.
- People: We deeply care about our clients’ and our peoples’ lives. For years, Generali has sat back and watched victims’ life savings being lost because of clearly unsuitable and risky structured notes. This demonstrates that Generali cares nothing about the clients and this is yet another black lie.
- Lives: Ultimately, we have an impact on the quality of people’s lives: wealth, safety, advice and service are instrumental in improving people’s chosen way of life for the long term. This is true – Generali has had a huge impact on the quality of hundreds of victims’ lives, by destroying their life savings.
- We tie a long-term contract of mutual trust with our people, clients and stakeholders; all of our work is about improving the lives of our clients. Generali has destroyed rather than improved the lives of clients.
- We commit with discipline and integrity to bringing this promise to life and making an impact within a long lasting relationship. Another black lie. There has been no discipline and no integrity. The impact by Generali has been destructive, toxic and dishonest.
GENERALI RESPONSE TO COMPLAINT DATED 20TH APRIL 2018

Thank you for your email dated 23 February 2018 attaching your updated Letter of Complaint and further accompanying undated cover letter concerning the performance of your Trustees’ Portfolio.

And here we have the first and biggest part of the scam. Generali is trying to make out that the client is not the client – but the pension trustee is the client. The only reason a trustee is used is to comply with HMRC rules. In the UK, HMRC contributes tax relief to help individuals build up as much value as possible in their pensions. But if the fund is transferred offshore, it has to be sent to a QROPS (qualifying, recognised, overseas pension scheme) – otherwise HMRC will charge 55% tax on the transfer. A QROPS is just a wrapper used to hold the funds. The trustee is a custodian used to keep the funds on behalf of the beneficiary – i.e. the member.

It wasn’t the trustee who worked hard for years to build up this fund out of the money he or she earned. Just as it won’t be the trustee who will retire on the income generated by the fund.

Let us look at the risk profile issue. Whose risk profile is done using a fact find? Is it the trustee’s? Is the trustee asked about his assets, liabilities, age, retirement plans? No, of course not. Is the advice to transfer given to the trustee? Negative.

Your complaint is addressed primarily to Old Mutual International (“OMI”) but it asserts that “Generali has acted in exactly the same manner as OMI, so although the complaint below relates to OMI, it is also appropriate for Generali. The problems complained about remain the same in both cases. We therefore respond to all the issues raised in the letter as if they are addressed directly to Generali Worldwide Insurance Company Limited (“Generali Worldwide”), as your complaint clearly intends.

It is clearly evidenced that Generali behaved as badly and negligently as OMI and SEB – and betrayed the victims in exactly the same way.

You have expressed deep concern that the Professional Portfolio has lost a significant proportion of its value because of the actions of the Portfolio Manager, Continental Wealth Management (”CWM”).

And herein lies the second part of the scam. Generali did no due diligence on CWM. They have referred to them as “Portfolio Manager”. But they had no license to be a portfolio manager – and they had a track record of cold calling and being involved in financial crime. So – irrespective of whether Generali thought the client/investor was the trustee or the victim – Generali should never have accepted investment dealing instructions from such a firm.

You also consider that Generali worldwide is ´complicit´ given we allegedly took no steps to stop the actions CWM took at the relevant time. Correct.

We are of course very sorry that the Portfolio has incurred losses following the investment decisions made by CWM. When did this “sorry” state begin? On the 23^rd February 2018 when they received the letter of complaint? Or at some time during the past six years when they sat and watched hundreds of policy holders’ funds being systematically destroyed?

We address the specific issues raised in your letter below.

The Portfolio

In order to address the issues you have raised it is first necessary to consider the relationship between you, the trustee (that you instructed to purchase the Portfolio) and CWM. Don’t forget the life office – Generali – itself. It was an integral part of this scam.

The Portfolio was established by your nominated Pension Trustee Momentum Pensions Malta Limited (“Trustee”) on 30 January 2013. In total you remitted GBP 473,043.29 to the Trustee and they used these monies to purchase the Portfolio, which itself is held in a trust. So Generali admits that it was the member which remitted £473k in the first place.

You are the first life assured on the Portfolio. The Trustee is the legal owner of the Portfolio and, in the first instance, it is they that have suffered the investment losses. So, the member himself hasn’t lost half of his original £473k? Thank goodness! So, if he just redeems out of this useless, exorbitantly expensive insurance bond, he can have all of his £473k back?

The Trustees owe you fiduciary duties in respect of your money “Your money”? So, you are sure it is the victim’s money and not the trustee’s money? You can’t seem to make up your mind whose money it is. I think Generali is getting dementia as it can’t remember what lies it has just told. In one sentence it is the trustee’s money and in the next it is the victim’s.

(which was “settled” into the trust) as basis for remittance into the Portfolio.

As the legal owner of the portfolio, it is the trustee that appointed CWM as the Portfolio Manager pursuant to the Portfolio Management Agreement dated 7 November 2012 (“PMA”). But did you, Generali, not notice that CWM was an unlicensed scammer? And once you started seeing, and reporting on, the huge losses did you not consider you had some responsibility beyond just reporting on the repeated losses for years?

CWM therefore owed contractual duties to the Trustee in Respect of the management of the Portfolio. Yes. And you, Generali, also owed duties to the victim whose money was being frittered away by the scammers. You have admitted it was HIS money.

Issues Raised

The letter of Complaint raises various issues. We consider that these can be summarised as follows:
1. You allege that CWM purchased “high risk, professional-investors-only structures notes” which you consider were unsuitable for your investment risk profile.
2. You allege that CWM gave advice and instructed sales and purchase of investments despite the fact that they were “neither licensed for insurance nor for investment”.
3. You have raised an issue with what you consider were the high commissions paid to CWM.
4. You have alleged that you were not informed of the level of charges that would be taken pursuant to the portfolio´s terms and conditions.
5. You allege that your signatures were “repeatedly forged on the dealing instructions”.
6. Finally you agree CWM made misrepresentations to you about the losses you were incurring.
You have also stated that OMI, and therefore we assume Generali Worldwide, have “facilitated financial crime over a period of many years”. You have asked that Generali Worldwide “own up to the financial damage and crime it has facilitated over a period in excess of eight years” and compensate you for the losses the Portfolio has suffered.

Portfolio Management Agreement

The PMA (enclosed), authorised fees for the portfolio management services as rendered (being 1% per annum of the Investment Value). And, as we know, this is Generali’s way of clawing back the 8% commission paid to the scammers. There was no “portfolio management”. Had there been any kind of management, this would have included doing something about the inexorable losses rather than just sitting there watching this victim’s losses mounting over a period of years. Bearing in mind he was one of many in the same boat, this makes it doubly disgusting that Generali took no action. You must have been aware that this victim – along with all the hundreds of others – had their life savings used to purchase professional-investor-only and high-risk structured notes.

As such, all instructions in relation to your Trustees´ Portfolio were properly issued by CWM, which we acted properly on in accordance with the PMA. Not true. The members’ signatures were forged. That is fraud. And you, Generali, facilitated financial crime.

Please note that Generali Worldwide is not a party to (or aware of) any commission arrangements between CWM and any investment product issuers. Really? Did you think CWM was just selling these toxic products for fun? You didn’t consider that as the only reason for selling the insurance bond was for the 8% commission, there might be another 8% commission for selling the structured notes?

In appointing CWM as the portfolio manager under the PMA, the Trustee expressly warranted that it would be bound by the decisions of CWM and recognised that CWM were acting for them, not Generali Worldwide. Furthermore, in appointing CWM the Trustees agreed that Generali Worldwide “shall not be liable for any damages, losses, costs or expenses to the Plan assets arising from the appointment of, or the investment instructions given by the Portfolio Manager. There is an interesting parallel here. The CWM scammers all say the same thing: “it wasn’t my fault; I didn’t do anything wrong; it was the others”

This will include, without limitation, any action or failure to take actions on the part of the Portfolio Manager to produce a reasonable investment return, in relation to the plan. So, you are saying that it is reasonable for Generali to have just sat there and said/done nothing about the losses for years? You could see millions of pounds’ worth of life savings getting wiped out routinely and yet you did nothing to help the hundreds of victims. Your website claims that Generali “protects, manages and mitigates risks”. So that is obviously another lie.

The Trustee also agreed to “indemnify (Generali Worldwide) against any and all liability it may incur, as a consequence of, or arising from or in respect of the appointment, activities and performance of the Portfolio Manager…” But did the victim agree to indemnify Generali? You have already admitted that it was HIS money. On the Generali website it states: “Meeting your financial needs: Effective wealth management, investment and pension options that can successfully cater for the diverse needs of global investors”. So do the words “effective” and “successfully” include sitting back and doing nothing about the losses? Generali could have picked up the phone and spoken to the trustee and/or the victim (depending on which party you considered “owned” the money that day) and said something along the following lines:

“Look, mate, we’ve been having a bit of a look at this portfolio. We’ve spotted that over the past couple of years it has halved in value. We’ve also checked up on the adviser, CWM, and we’ve realised the firm is not licensed to give investment advice and is operating illegally in Spain. We’ve also found out that it has been scamming people for years. We’ve also noticed that 100% of the investments are toxic, high-risk structured notes which are FOR PROFESSIONAL INVESTORS ONLY. We’ve also realised that the combination of failed investments and our own huge charges are eventually going to wipe this (and many other) portfolios out altogether. Do you think we ought to do something? Or shall we just sit here and let it happen?”

Continental Wealth Management

CWM are an independent firm of brokers, No they were not. In Spain it is illegal to work as a broker – whether for insurance or investments – without a license. CWM had no license.

entirely distinct from Generali Worldwide. Under Guernsey law, Generali Worldwide is prohibited from appointing agents in the sale of its policies. Guernsey law is irrelevant. CWM was based in Spain. It is only Spanish law that counts. Generali should have checked up to see whether CWM was licensed and when it discovered it had no license, Generali should have refused to accept any further investment instructions from the firm.

CWM owed duties to you / the trustee alone in recommending the Portfolio and providing suitable financial advice prior to its purchase. I wish you would make up your mind. You can’t seem to decide whether it is the victim or the trustee who is the client/investor. And now you are trying to make out it is both.

It is CWM, not Generali Worldwide, that had a duty to advise you / the Trustee of the suitability of the portfolio and its terms, including the relevant fees. At the time of the trustee´s application, Generali Worldwide were not party to the discussions regarding your chosen risk profile. Whose risk profile? The victim’s or the trustee’s?

CWM are solely responsible for any advice provided to you / the Trustee. It is a common misunderstanding that Independent Financial Advisers and similar Intermediaries are “representatives” of the insurer even though as a matter of law that is not the case in circumstances such as these. CWM was indeed responsible for the scam which Generali facilitated. But CWM was not licensed to provide anybody, whether the victim or the trustee, with either insurance or investment advice. And yet Generali accepted hundreds – possibly thousands – of investment dealing instructions from them. And when the victims started losing millions of pounds, Generali never questioned whether this unlicensed advice was going terribly wrong.

If you believe that relevant information about your Portfolio was either misrepresented or not properly explained to you / the Trustee at the time of the application you should seek redress directly with CWM or your Trustee. Again, legally, if there is an issue with the portfolio itself, which is denied, the correct person to complain to Generali Worldwide is the Trustee. In turn, the trustee owes you fiduciary duties in respect of the money you provided to them on trust. Just like all the scammers at CWM: it is everybody else’s fault but not theirs. The issue with the portfolio itself was that it served no purpose except to pay commission to the scammers – and provided no protection or benefit to the victims whatsoever. Indeed, the Generali wrapper simply made matters considerably worse by constantly eroding what little was left of the ever-dwindling funds with the constant quarterly charges.

In respect of the allegations that CWM misrepresented the performance of the Portfolio, again this is a matter for CWM, and their successors in title, to address. Generali Worldwide are not party to the updates that were provided. However, we note that you had access to our Online Service Centre where it was possible to view the performance of the Portfolio at any time. But didn’t Generali view the performance of this portfolio – and hundreds of others – and question what the hell was going on with all the CWM victims?

Regarding the instructions from CWM and any “forged signatures”, we comment that all the instructions received by Generali Worldwide from CWM were properly executed by them as the portfolio manager. Does Generali seriously believe that an unlicensed firm, operating illegally in Spain, was executing millions of pounds’ worth of dealing instructions (most of which resulted in huge losses) “properly”? This is an unbelievable statement.

Given their status as portfolio manager, any instruction only needs to bear their signature (or alternatively the signature of the Trustees). Signatures of the life assured are not required, as there is no contractual relationship between Generali Worldwide and the lives assured (and consequently the lives assured do not have authority to issue dealing instructions). We are not able to comment on whether the other signatures that appear on the instruction were forged. However given the PMA, it is Generali Worldwide´s position that it was the signature of CWM (or the trustee) which validate the instructions. CWM had no status as portfolio manager. Neither the firm nor the individuals were licensed. No dealing instructions should have been accepted from them EVER, under any circumstances whatsoever. Why do you think Malta has just made changes to the regulations to stop this from happening again?

Notwithstanding this, we are concerned to note any potential allegations of fraudulent activity and would encourage you to escalate any issue in this regard to the competent authorities, as necessary. Generali has facilitated financial crime – irresponsibly and negligently. Generali is being reported to the competent authorities.

Contractual Terms and Conditions

The Portfolio is governed by and constructed in accordance with Guernsey law, with contract acceptance (and policy issuance) having taken place in Guernsey. Your Trustee´s application was accepted in good faith in Guernsey on an unsolicited basis in 2013. Based on completion of the application your Trustee thereby confirmed their acceptance, and understanding of the portfolio´s Terms and Conditions. But who is the client? The trustee or the victim. Generali seems to change its mind depending on what argument it is trying to make. The broker and the owner of the funds were based in Spain (and the trustee in Malta) so Guernsey law is irrelevant.

As noted in section 10 of the terms and conditions (enclosed), your Trustee and Portfolio Manager are responsible for investment decisions and any choice of Investment Instruments is entirely at your Trustee´s own risk and it is they that had oversight over the investment settings made. Generali Worldwide accepts no liability for the performance of investment instruments or for losses, damages or costs arising out of, or in connection with Generali Worldwide subscribing to, or otherwise acquiring an interest in an Investment Instrument for allocation to the Portfolio. You will also appreciate that Generali Worldwide was not party to the advice provided to you (or the Trustee), or the rationale for investment decisions made by CWM in respect of the Portfolio (which we note is described in your covering letter). Again, Generali can’t make up its mind whether the client is the victim or the trustee. Either way, this argument seems to make it clear that there was absolutely no point whatsoever in having an insurance bond at all. It provided no protection and only served to hasten the destruction of the funds.

In respect of the portfolio´s fees and charges, these are laid out in section 15 of the enclosed Terms and Conditions. In signing the application form dated 7 November 2012 your Trustee confirmed that they understood the Terms and Conditions. So, it was all the trustee’s fault? But what were these fees and charges for? For sitting there and doing nothing about the destruction of the funds and facilitating financial crime? Under the terms of the contract for this so-called life assurance policy, generali stands to earn £47,304.33 – but for doing what exactly? Bugger all as far as I can see.

It was CWM´s duty to advise the Trustee as well as yourself in respect of the Portfolio´s Terms and Conditions. But CWM was not licensed to give advice – so how could it?

We therefore consider the contractual terms associated with the fees and charges in relation to the Portfolio to be clear. I agree: it is 100% clear that the contract is for Generali to pay a huge commission to a known firm of unlicensed scammers, and to charge quarterly fees to provide no protection or management or mitigation of risks (as falsely claimed on the Generali website).

Discussions with the Trustee and Trafalgar

We have corresponded with both your Trustee and Trafalgar International GmbH (Trafalgar) following your complaint. Given that CWM have entered into liquidation, we understand that Trafalgar have now taken on any liability for the actions of CWM (and are in turn licensed in Germany). So, yet again it is everybody else’s fault and responsibility – except Generali’s.

From publicly available information we have seen that Trafalgar have engaged with your Trustee to try to provide a solution to the issues that they and their beneficiaries face as a result of CWM´s actions. We have also confirmed this directly with representatives of your Trustees and Trafalgar/GlobalNet. We also note from our files that CWM have previously recognised it was their actions that led to some of the losses on the Portfolios and made offers to compensate the beneficiaries. What relevance does this have? This is a complaint against Generali – not a complaint against CWM. The CWM scammers are long gone and the company is worthless.

We have written to Trafalgar regarding your complaint. But this is about a complaint against Generali. What is the point of Generali writing to Trafalgar? Trafalgar didn’t operate this insurance bond. Trafalgar wasn’t on the scene in 2013.

They have told us that they have been trying to provide redress to the former clients of CWM and will respond formally to us in this regard. As yet we have not received any further correspondence from them and we are following up further for any updates. Yet again, Generali is just trying to deflect attention from their own lies and failings. But at least there is a tacit acknowledgement that redress is not only required, but that Trafalgar is trying to provide it (with no help from Generali).

Conclusion

Again, we are very sorry to learn that your Trustee´s Portfolio has suffered the losses you described. We understand that this is a source of deep concern for you and the other former clients of CWM that have been adversely affected. However based on the above, regrettably Generali Worldwide is unable to provide the requested redress. Presumably, if the losses are to be borne by the trustees, then the victim can have all his money back? This constant banging on about the trustee “suffering the losses” is pointless. If it is really true, then as Generali has acknowledged that the victim owns the money, then give it back to him. In full.

CWM advised your Trustee in respect of the purchase of the Portfolio and its management pursuant to the PMA. But was not licensed to do so – and therefore did so illegally.

We repeat that CWM are not an agent of Generali Worldwide. Any fees, charges or commissions are in line with the Portfolio´s Terms and Conditions which we consider are clear. It was CWM´s responsibility to explain these to you / the Trustee at the time of their application. But it is also clear that CWM was not licensed, so this is irrelevant.

The Trustees are entirely responsible for any losses incurred on the Portfolio as a result of the actions undertaken by CWM. Generali Worldwide were not a party to any alleged misrepresentations regarding the Portfolio´s performance. All instructions received from CWM were valid and pursuant to the terms on the PMA. Does the PMA specifically state that instructions can be accepted “validly” from unlicensed, known scammers who are trading illegally? Perhaps when your pants catch fire, you’d like to go to an unqualified, unlicensed scammer posing as a doctor?

At no point did Generali Worldwide act improperly, and there is no contractual basis for deviating from the contract terms nor is there any justification for compensation from Generali Worldwide. So, you are acknowledging that there is absolutely no point whatsoever in having a Generali insurance bond? And admitting that the claims made on the Generali website are false?

Our purpose is to actively protect and enhance people’s lives

We play a proactive and leading role in improving people’s lives through insurance.
- We are dedicated to the heart of insurance – managing and mitigating risks of individuals and institutions.
- Generali is also committed to creating value
- We deeply care about our clients’ and our peoples’ lives
- We have an impact on the quality of people’s lives: wealth, safety, advice and service are instrumental in improving people’s chosen way of life for the long term.
For the avoidance of Doubt Generali Worldwide strenuously denies that we have committed or facilitated any financial crimes as alleged. But throughout this absurd denial, Generali has indeed admitted repeatedly that it has facilitated financial crime by placing so much emphasis and responsibility at the feet of an unlicensed firm of scammers operating illegally in Spain.

This complaint, and the ridiculous response by Generali, will now be referred to the Financial Crime Unit in Jersey as well as the:

Channel Islands Financial Ombudsman

PO Box 114

Jersey,

Channel Islands JE4 9QG

Email: enquiries@ci-fo.org

Website: www.ci-fo.org

Jersey phone: 01534 748610

Guernsey phone: 01481 722218

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What is a Pension Scam?
May 11, 2018
Keep Calm: Just avoid OMI/Quilter

OLD MUTUAL INTERNATIONAL HYPOCRISY OVER NEW MALTA REGULATIONS

OMI’s Peter Kenny advises the industry to “keep calm”.

He obviously wants to be able to keep flogging these useless, pointless and exorbitantly expensive insurance bonds to thousands of innocent victims.

With the announcement of new regulations in Malta for QROPS, International Adviser has quoted managing director of OMI (soon to be Quilter) Peter Kenny: “Old Mutual International is encouraging all market participants to help rid the industry of inappropriate structured products“.

Kenny´s statement, to the untrained eye, may seem logical and thoughtful. However, here at Pension Life we are well educated about OMI´s dirty laundry and routine use of toxic structured notes.

The statement Peter Kenny made is downright hypocritical. He is clouding the irresponsible and negligent actions OMI have made in the past, and the damage the high-risk structured products have inflicted on pension funds. Kenny hasn´t even mentioned the huge quarterly fees OMI have applied to ever-dwindling pension funds.

These fees are OMI´s way of clawing back the commissions paid to the scammers. And this is why victims are tied into these insurance bonds for so many years, and why there are such enormous penalties for exiting the bonds.

Kenny told International Adviser:

“The Malta Financial Services Authority’s proposed new regulations are sensible, appropriate measures to be taking.

Specifically, we welcome greater restrictions on structured notes. Old Mutual International is encouraging all market participants to help rid the industry of inappropriate structured products which are having a damaging impact on investor confidence and outcomes.

Over the years, Old Mutual International has taken action to tighten its criteria, introduced a maximum fee level, and in some cases banned certain types of structured products from certain institutions.

Not all structured products are bad, and they can be useful for clients who want a degree of capital protection whilst also providing exposure to investment markets or a fixed return. However, many structured products are often very complex in design. Regrettably, some investors and advisers will not always possess the depth of knowledge required to fully understand the risks and rewards associated with investing in such structured products.”

Doesn´t that sound lovely in theory! However, I´m sure the victims of the CWM pension scam would not agree.

“Specifically, we welcome greater restrictions on structured notes. Old Mutual International is encouraging all market participants to help rid the industry of inappropriate structured products which are having a damaging impact on investor confidence and outcomes.”

For the last eight years at least, OMI have allowed the use of structured notes. We have seen many examples of victims having 100% of their portfolios invested in structured notes – including the fraudulent Leonteq ones. We have the hundreds of victims of the CWM pension scandal as evidence of this.

Peter Kenny must surely be aware that OMI were happy to invest the life savings of the CWM victims into structured products which clearly stated at the top of the investment sheets (so as even the most short-sighted OMI employee could not miss it):

HIGH-RISK AND FOR PROFESSIONAL INVESTORS ONLY

Here at Pension Life, we do hope that even trainees at OMI are aware that pension fund members are retail investors and should be placed into low to medium risk, liquid investments. However, it seems that these details obviously don´t feature in OMI´s training manual.

Structured products are illiquid and they often lock the fund in for fixed terms – up to 5 years. Added to this is the fact that victims were also locked into ten or eleven-year term OMI´s life assurance policies. It is absolutely ridiculous to lock people into a product which does nothing to protect the funds and only serves to erode the value of the funds with the exorbitant quarterly charges which inexorably “drag” the fund down.

“Over the years, Old Mutual International has taken action to tighten its criteria, introduced a maximum fee level, and in some cases banned certain types of structured products from certain institutions.”

This is an outright lie and we have hard evidence that even in the past couple of years, OMI has done nothing to tighten its criteria in any of the CWM cases. In fact, OMI were still accepting fraudulent Leonteq structured notes up until very recently. Peter Kenny is being dishonest as the reality is that there was no thought or care at all over a very long period.

One Pension Life member started with a fund of £38,000. His last valuation showed that it was now worth just £800. When OMI apply their next quarterly fee, the entire fund will be wiped out as OMI simply kept taking their fees based on 11% of the original value (as opposed to the constantly dropping value). But clearly OMI didn’t care or even show any interest – they made a packet in fees, paid a huge commission to the CWM scammers and sat back and did nothing while the fund dwindled to nothing.

“Not all structured products are bad, and they can be useful for clients who want a degree of capital protection…”

I highlight here a “degree of capital protection” – just a degree? Pension funds are normally a person’s life savings. So what does a “degree” mean? 10%, 50% perhaps 75%? The degree of capital protection in the case of the CWM/OMI scam was 0%.

“Regrettably, some investors and advisers will not always possess the depth of knowledge required to fully understand the risks and rewards associated with investing in such structured products.”

Regrettably for the investors who were victims of the CWM scammers and OMI, they most definitely did not possess the depth of knowledge required to fully understand the risks. They put their faith in the smartly- dressed scammers. With promises of high returns, the high risk of the investments and high fees to be charged were left unmentioned. OMI were supposed to protect the victims’ interests but failed dismally to lift a finger to help arrest the downward spiral of the funds.

OMI just sat there like a lazy, greedy, callous parasite and watched the victims’ retirement savings dwindle.

Malta´s new regulations have been put into place to protect investors from scammers like CWM and firms like OMI. I think OMI are secretly seething as the changes to the regulations will surely affect their already dropping profits.

International Adviser also reported on 30 Apr 18:

“Quilter, formerly Old Mutual Wealth, said its assets under management and administration had fallen in the first quarter of 2018.”

Here´s hoping they fall further – much further – 2/3rds further like Pension Life members Pete and Val´s did. Peter Kenny needs to experience a taste of how the victims of the CWM scam felt at finally receiving the news that their pension funds had been left in tatters.

May 10, 2018
SEB – DESTROYING LIFE SAVINGS
SEB – DESTROYING LIFE SAVINGS – accepting business and investment instructions from unlicensed scammers.

SEB Life International Assurance offers so-called life assurance policies to expats living in Spain. SEB claim that their policies are straightforward and help investors to construct investment portfolios specifically to individual needs. The truth is, life assurance policies with SEB destroy life savings.

In reality, SEB – along with many other life offices – merely serves to facilitate financial crime. In the case of victim Dave, SEB accepted investment instructions from a known firm of unlicensed scammers: Continental Wealth Management. SEB allowed them to invest 100% of Dave’s retirement portfolio in toxic structured notes which resulted in him losing nearly two thirds of his life savings.

SEB – DESTROYING LIFE SAVINGS: Dave, resident in Spain, transferred his pension fund to a QROPS in December of 2012. The scammers put him into an SEB “bond” which was supposedly “Spanish compliant”. Continental Wealth then invested £160,000 into one high-risk, professional-investor-only structured note and kept £7,000 in cash for SEB’s fees – basically a claw-back of the commission paid to the scammers.

In December 2015 Dave was sent his annual policy valuation by SEB. The opening policy value was just over £90,000 – £60,000 LESS than the original value three years earlier. A year later, the fund was worth just under £55,000. Two thirds of Dave’s pension pot had dribbled out from bad investments and high policy charges – thanks to SEB letting the scammers play fast and loose with the money.

Despite these crippling losses, SEB continued to charging their quarterly policy fees.

In 2013 and 2016 SEB wrote to Dave, informing him that he did not have a “nominated asset” to keep his cash balance positive – so that SEB could keep taking their own fees while they sat and watched Dave’s funds being destroyed by the scammers. This entailed Dave’s fund suffering a further loss as an early redemption of structured notes inevitably results in a loss.

The SEB website claims:
- “Commitment to outstanding client servicing” If sitting back like a lazy parasite and watching a client’s life savings lose 2/3 of its value is “outstanding” we hate to think what “bad” client servicing is.
- “Highly secure and reputable company with sound financial backing” We are glad to hear SEB has financial backing – it is going to need it to pay redress to Dave and all the other victims whose pensions were destroyed by scammers. This will be the real test of whether SEB is “highly secure and reputable”.
- “Competitive products” We would not consider high-risk structured notes to be “competitive” in any way – they are totally unsuitable for pensions. SEB should have known this and should not have allowed the victims’ life savings to be invested in such toxic products.
- “SEB Life International aims to provide superior long-term investment performance and a broad range of products to suit complex investment needs. So, whatever your investment needs, managing a sophisticated portfolio or simply saving for the future – you’ll find solutions here.” In Dave’s case, there was NO superior long-term investment performance. Just massive losses through investing his hard earned cash into toxic, high-risk structured notes which were clearly labeled “for professional investors only”.
Dave can certainly vouch for the fact that in his case, the only outstanding client service SEB delivered was the guarantee of taking their quarterly fees – and even causing him further losses to keep sufficient cash in the portfolio so they could help themselves to his money.

SEB’s website also claims that the only investments they will accept are:

• SEB Life International internal Unit-Linked Funds (including Internal and Select List Funds and Standard
Profiles)
• Undertakings for Collective Investments in Transferable Securities (UCITS)
• Retail Authorised EU based Collective Investment Schemes1
• Cash and Fixed Deposits
The policyholder may only switch from among the different groups of assets detailed above.

Structured Notes will not be accepted.

So, in addition to facilitating financial crime and paying known scammers huge commissions to destroy victims’ life savings, SEB Life International are outright liars. Dave, along with hundreds of other victims, had their retirement funds invested in structured notes provided by Commerzbank, RBC, Nomura and the fraudsters at Leonteq.
May 8, 2018
Protecting your pension fund from pension vampires

Protect your pension fund at all costs. Pension “vampires” disguised as friendly and legitimate pension advisers are still out there – prowling the land trying to find victims. Ever evolving and changing their strategies to seduce you into transferring your pension fund, often into a high-risk, toxic investment that rewards them with high commission but leaves your pension fund and your health frazzled.

Pension vampires are very good at wearing disguises AND their credible eloquence and charming manner are sure to get your attention. This is why here at Pension Life we want to raise public awareness to discourage individuals from being drawn in by the vampires’ compelling sales techniques. We want victims to learn how to protect your pension fund.

Con artists and pension scammers love to cold call and give the impression they are official government representatives or fully qualified and regulated advisers. They are very clever at worming their way into victims’ homes and setting these vulnerable people up to get scammed out of their pensions.

THIS SHOULD NEVER HAPPEN

If you are cold called – please just hang up.

Much like a vampire, once you have invited them into your life, it is very difficult to get rid of them. They will trick you into transferring you pension fund into their care – often with promises of high returns and low risk. In reality, they will bleed you dry.

What these pension vampires leave out of their convincing sales pitch is the high commission charges they will add every time they put your fund into a new or different investment. Often the commission charges heavily outweigh the interest that will be applied to the investment should it be successful.

Pension vampires hunt in packs and the first one you meet will NOT be the last. Often the first pension vampire will introduce you to several others. Each one will want to have a suck on your fund. This type of pension scam is called fractional scamming its happening more and more. Please have a look at our previous blog on fractional scammers for more information on how this type of scam works.

Pension vampires not only use cold calling techniques, they also send emails and use the postal system. The content is usually the same – they offer you a free pension review.

Nothing in life comes for free – the review may seem to be free but what comes after will be devastating to your pension fund and your health.

Pete and Val fell victim to pension vampires using a pension liberation scam – here’s the tragic story of how their pension fund was left decimated by a firm of unlicensed so-called advisers: Continental Wealth Management.

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(more…)

May 2, 2018
Maltese QROPS regulations to change
Malta has announced changes to the way their QROPS funds will be regulated. The changes will come into effect from 2^nd July 2018, meaning that clients introduced by an adviser regulated only for insurance business will not be accepted as an investment adviser.

A letter this week from STM Malta reads:

“We are writing to inform you of some changes to Malta regulations which we believe will have a significant impact on the way that you conduct your pensions business in Malta. Whilst the final guidelines have yet to be published, it is anticipated that the changes will be brought into effect from 2^nd July 2018. With these changes in mind, we felt it is a good idea that we commence discussions regarding how this will impact on some of our processes going forward.

In particular, the changes will require:
- An expectation of further oversight from pension trustees in relation to investment selections by members as recommended by advisers;
- A mandated restriction on investment in structured notes to 30% of a member’s portfolio with a maximum of 20% per issuer;
- A restriction on those permitted to give advice in relation to investment selection to advisers authorised to give investment advice via MIFID or equivalent regime. For clarity and from discussions with the regulator, we understand that a licence to advise on insurance products will not be considered an equivalent regime; and
- A requirement that Pension Trustees obtain and maintain information about the fitness and propriety of investment advisers selected by clients.
From the consultation process, we understand that the Regulator has experienced a number of complaints in relation to pensions and these changes are intended to address these issues.”

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Whilst this is an enormous step in the right direction for Malta, they are not the only country offering QROPS and therefore here at Pension Life we are calling for these regulations to be applied worldwide.

The lists here show that there are 28 other countries offering QROPS schemes. I can’t help but feel that unregulated (for investments) advisory firms will just change countries and continue to offer unregulated investment advice to innocent victims – but using QROPS in other jurisdictions.

Furthermore the decision has been made and announced, but will not come into place until 2nd July. That is nine weeks away. That’s 45 working days, 63 if they work weekends, that the unregulated advisers have to slog their guts out and get as many new “clients” to transfer their hard-earned funds – and invest them into unregulated, high risk, toxic investments. This may be the last opportunity to earn huge commissions in Malta. Then I guess these firms can have a wee holiday until they decide how best to alter the way they work.

STM’s letter goes on to state:

“Going forward we will need to fill the advice gap that is created and it occurs to us that there are two possible options for advisers going forward:

a) The adviser upgrades the license to become a regulated Investment Adviser; or

b) The investment is selected through a Discretionary Fund Manager which is a regulated Investment Manager”

What worries me is that the advisers with only an insurance license will be able to go on to become regulated, “upgraded” as the letter states, to fill the gap, so the process may be made easier for them.
- In response to the four changes reported by STM, I can see no mention of their past failures on a grand scale to carry out even the most basic due diligence on advisers or investments. STM has said nothing about the disastrous consequences of its own negligence – particularly in the case of the Trafalgar Multi Asset Fund;
- A restriction on investment in structured notes to 30% of a member’s portfolio with a maximum of 20% per issuer is still way too high – about 30% too high (and what about UCIS funds?);
- Restrictions on those permitted to give investment advice will need to be firmly policed. Firms with only an insurance license will inevitably try to continue as before. How will this be reported? And what action will be taken if trustees continue to accept dealing instructions from firms with no investment license? (A slap on the wrist with a soggy kipper?); and
- How will Pension Trustees decide whether investment advisers are fit and proper? One man’s fit and proper could be another man’s dodgy dealer.
One Pension Trustee in Malta told me recently that a grave concern of the industry is that firms who abide by the letter of the changes will lose out to firms that ignore them. This will set up an unequal competitive edge for those who interpret the new regulations more “loosely”. So, to make sure this new regime doesn’t end up as a bag of chocolate balls, the Maltese regulator has got to keep on his toes.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate regulated scheme. Get all the information in writing and get a third party to double check the details.

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.
May 1, 2018
Guardian Wealth Management and the two-horse race with Holborn Assets

Guardian Wealth Management and the two-horse race with Holborn Assets

This is the start of Guardian Wealth Management week – following the end of Holborn Assets week. Apart from bleats from Holborn Assets salesmen that I was compromising their chances of destroying more victims’ pensions, nobody has come forward and proposed realistic compensation offers for the existing victims.

So, I thought it would be good to set up a “race” between Guardian Wealth Management and Holborn Assets – with two new, fresh, thoroughbred complaints. And see which firm passes the post first.

But, first, let us have a look at the Guardian Wealth Management culture behind the scenes from the horse’s mouth: the self-employed salesmen who peddle Guardian’s products. These are published on www.glassdoor.com – and give an interesting insight into the inner workings of a financial services firm. Here are some of the comments:

“opportunistic”

Doesn’t Recommend – worked at Guardian Wealth Management full-time

Pros – Quick way to earn cash

Cons – Not always ethical with advice or product advice

This tells us a lot – GWM is an unethical selling machine (from this unhappy salesman’s experience)

Another unhappy guy relates even more details about the failings of the company:

“I do not recommend working here”

Doesn’t Recommend. Current Employee – Business Development Manager

Cons – poor training; poor communication; high staff turnover; lack of support; poor salary; constant changes to the business that are not needed; self-employed

Advice to Management: Look after your staff and actually value people over money. Your sales training needs a lot of work and you need to support new recruits rather than just weighing heavily on a manager that really just hogs all the leads.

This review tells us that the people who work for Guardian Wealth Management are nothing more than self-employed salesmen who work for commission on top of a pitiful basic “wage”.

“Working at Guardian”

Recommends – Current Employee

Pros – Great earning potential.

Cons – Can be high pressure, need to remain motivated and driven to achieve.

Just what we thought: pressure to sell, sell, sell! Doesn’t seem to be anything other than a bag of carrots to drive these salesmen to realise the “great earning potential” – rather than to provide good and appropriate financial advice.

“Business Development Manager”

Recommends – BDM in London

Pros – I currently work as a BDM for Guardian in their London office. I’ve been here just 5 months and have learned a huge amount. The guys here are extremely helpful and friendly. It’s hard work but the culture really is an advocate of the harder you work, the higher the rewards with no ceiling in place it’s up to you how successful you want to be.

So, this business development manager has got sucked into the intense sales-driven culture of Guardian Wealth Management – and all he can see is rewards for himself, rather than quality advice for clients.

Against this backdrop of high-pressure stable manners – and the constant pressure to win, win, win, the poor dumb schmucks at Guardian Wealth Management have no idea (yet) that if they fail to meet their sales targets, they’ll just be chucked on the muck heap. It is all about quantity, rather than quality.

The constant drive to flog more products – irrespective of whether they are right for the clients – just turns what should be a firm that strives for excellence into a sales sweatshop. They are also heavily into cold calling – I should know, as they cold called me a year or so ago and claimed to have offices in Spain.

This last Guardian Wealth Manager salesman has highlighted the fact that there is no “ceiling” to success. But what he has missed out is the fact that there is no floor to the depths the salesmen will go to scam victims for profit.

This week is Guardian Wealth Management week – and I will be kicking it off with a race to see which firm of scammers – Holborn Assets or Guardian Wealth Management – will be first past the post to compensate their victims. One from Israel and one from Australia. The stakes are high; the going is firm; the prize is glittering (a glowing compliment on the Pension Life blog). Take your seats for an exciting race.

April 21, 2018
Holborn Assets – What a cheek!

Seems we can´t get enough of Holborn Assets’ cheek this week. CEO Bob Parker has sent out a Q1 2018 newsletter and included on his mailing list a very unsatisfied and traumatised client who, through Holborn Assets’ negligence, has suffered a significant loss to her pension fund, with no compensation – or even apology.

Glynis Broadfoot was a victim of Holborn Assets’ rotten advice and service in 2011 and which resulted in her losing a significant portion of what had originally been a final-salary pension which should never have been transferred in the first place. Holborn Assets refused to help her, and simply kept taking their extortionate fees from her ever-shrinking pension pot. They had invested her in high-risk, professional-investor-only structured notes which were totally inappropriate for a low-risk investor.

You can imagine Mrs. Broadfoot’s fury and disgust when this message popped up in her inbox.

In summary, despite the expensive advice given to Mrs. Broadfoot by Holborn Assets, and assurances that her pension would grow at 8% per annum, she ended up losing nearly a third of her fund. Despite the fund’s losses, Holborn Assets continued to apply their fees to the fund, totaling somewhere in the region of £11k!

Holborn Assets informed her, at the height of her distress over her losses, that they “had closed the case, and would not enter into any further correspondence”. Yet now, several years on, it appears she’s still on their mailing list – despite knowing full well they have left this victim’s retirement prospects in tatters.

Mrs. Broadfoot’s case was typical of “fractional scams“: expensive and unnecessary insurance bond (only purpose was to pay a fat commission to the scammers); expensive, high-risk, professional-investor-only structured notes (again, high commissions for the scammers and heavy losses for the victim); hefty advisor fees. This was a very obvious scam which caused great suffering for the victim who is resident in Spain – but Holborn Assets was not licensed to provide investment advice in Spain.

In the years since Mrs. Broadfoot was scammed, Bob Parker did start to engage half-heartedly with a process of negotiating compensation for her losses. But so far she has not received one penny. Her local government final salary pension scheme – which she was conned into sacrificing by these unlicensed scammers – would have provided her with a guaranteed, index-linked pension for life and she could have retired comfortably. Instead, she has a seriously damaged fund which is unlikely to ever recover and provide her with the retirement income she needed and deserved.

So, far from getting the “best level of service and advice available” as boasted by Bob Parker, Mrs. Broadfoot was conned, scammed, fleeced and then dumped by Holborn Assets.

Which brings me on to the Trust Pilot reviews. Only 2% scored Holborn Assets as average or poor. Which is very surprising – given the number of people who report similar stories to Mrs. Broadfoot’s. But I think it is likely that those who gave four or five stars, haven’t yet found out what their losses are. In fact, some of these reviewers admit they were cold called by Holborn Assets. We know for sure Claudia Shaw was flogging the high-risk Premier New Earth Recycling UCIS fund to her victims and that there have been heavy investment losses.

One person who has given Holborn Assets a “poor” rating on Trust Pilot is a Mr. Norton who writes:

Not very impressed

I don’t believe anyone from Holborn has contacted me since September last year. In August 2016 I was contacted and advised to switch my policy which seemed ridiculous considering the additional charges I would incur, the fact it was even suggested causes me concern.

Then in September 2016, I was contacted to recommend my wealth manager for an award, again the audacity of this makes me wonder.

I have no idea on what your investment performance to date is over the past 12 months and I have not been given any confidence how my investments will be managed going forward now that I have finished paying your fees and I actually begin to get money invested.

I do plan to visit within the next month and hopefully by that stage you in a position to assure me I did not make a big mistake investing my money with you.
Regards
Ian Norton

Another victim has complained directly to Pension Life about the appalling treatment he has had at the hands of Holborn Assets:

“Since 2013, the fund has not done anything at all. The fees are much too high, excessive transactions have been made to earn themselves money on my account and the investments went down in value. There is no communication with Holborn Assets and they are unwilling to discuss this matter with me or to do anything about it.”

So, as the cheeky Bob Parker is aiming to infiltrate South Africa with his new weapon – the bright-eyed and bushy-chinned Lourens Reichert – I thought now would be a good time to make friends with Reichert and see if he can put some pressure on Uncle Bob. Reichert will, no doubt, be very pleased to help me sort these victims out – as he has a big bulging lump in his trousers courtesy of Bob’s golden handshake.

I might even nip down to Johannesburg and have a cup of tea and a cheeky biscuit with him. No doubt, he won’t want the sordid details of Holborn Assets’ scams to compromise his quest to conquer South Africa. If the natives find out just what his colleagues have been up to, he might find himself on the wrong end of a Zulu spear.

April 19, 2018
Fractional scamming – The trending pension scam

Having read Henry Tapper’s A Master Class in Fractional Scamming, here at Pension Life we feel we should share some facts with our readers about the “trending” investment and pension scam of 2018 – fractional scamming.

First of all here´s a bit about the fractional scam:

Today with new regulations, pension liberation has pretty much gone out of the window. Instead, victims are being offered to transfer their pension fund into a “new” scheme and invest in funds with promises of high returns and low risks. What is hidden in the small print is that whilst there MIGHT be high returns (possibly, if the wind is blowing in the right direction for long enough), the fund has to work its way through the hands of many parasitic introducers and advisers – each one taking their own fraction of the fund.

Henry Tapper uses a Pizza as a great example. Say you ordered a pizza which has been cut into eight slices. On its way to you, the pizza goes past 6 people, and each one takes a slice. Therefore 3/4 of the pizza has already been eaten by the time it gets to you. That does not leave much for you, the person whose pizza it was supposed to be.

This is what is happening to pension funds subjected to fractional scamming, they are being passed from one adviser to another and each one takes their slice.

So whilst the pension fund may well be going into a high-return investment, (when they finally arrive there), the fund has to recover from the percentage slices taken before any profit can be made. Using the pizza as an example, 75% of it was eaten before it arrived at its promised destination. 75% is a pretty high figure – even if the investment interest is 6.5%/7.5% – it is going to take another lifetime to get it back to its original value. Something the victims of fractional scamming don´t have.

The trending pension scam, fractional scamming – this image shows how the scammers skim their slice of the victims’ pension fund in this new wave of pension scam. Chip, chip, chipping away until the original pot is but a fragment of its original state.

What is most frustrating about the situation is that many of the people benefiting from the fractional scam are unregulated advisers. They are the unauthorised introducers who work with unauthorised – as well as authorised – IFAS who worked with Pension Trustees to transfer money into overseas funds. Each one taking their fraction of the fund.

$Pension Life blog - Fractional Scamming - The trending pension scam - don´t let your pension pot fall victim to fractional scamming$

Ways to avoid falling victim to fractional scamming are to ensure that the adviser you are proposing to use is fully authorised by the FCA in the UK. Or by the appropriate regulator in whichever jurisdiction you are resident. Do your own due diligence to ensure that you know all the facts about the transfer of your pension fund. What are the fees – as in ALL THE FEES – relating to the transfer; where will the fund be going and what exactly will it be invested in.

If you are cold called – HANG UP IMMEDIATELY

Do the adviser’s promises sound too good to be true? IF THEY DO, THEY PROBABLY ARE

High return/low risk investment – NO SUCH THING

The illustration on the left is based on the Continental Wealth Management scam which saw nearly 1,000 people have around £100 million worth of retirement savings put at risk. The first year would have cost the victim at least 16% of the fund, and thereafter around 8% a year. So it never had any chance of growing – while the “advisers”, bond provider and structured note providers got fat and rich.

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As always, Pension Life would like to remind you that if you are planning to transfer any pension funds, make sure that you are transferring into a legitimate scheme. To find out how to avoid being scammed, please see our blog:

What is a pension scam?

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April 19, 2018