Tag: Pensions Ombudsman

Trustees Must Block Transfers to Pension Scams
Trustees have the power to block pension transfers if they suspect a scam – they must use it! Now the Ombudsman has upheld a complaint against the Police trustee, there is hope for further justice against negligent pension trustees.

In the Royal London v Hughes case, Royal London suspected an attempted transfer was destined to go into a scam and blocked it. The member, Ms Hughes, complained to the Pensions Ombudsman – but he did not uphold her complaint. He said that Royal London was quite right to block the transfer. But Ms Hughes appealed the matter to the High Court and the judge overturned the Ombudsman’s determination.

The industry was, naturally, appalled. But this matter left many questions unanswered:
- Why was a singing teacher so desperate to transfer her £8,000 pension and have it invested in Cape Verde property? (Had she developed a passion for collapsible flats?)
- Where did she get the many thousands of pounds it must have cost her to have a barrister represent her in the High Court? (Considerably more than eight thousand quid I reckon).
- How come the mighty Fenner Moeran QC (for Royal London) got so soundly defeated by a public access barrister? (Was his sharp stick a bit blunt that day?)
- What happened to the several hundred people queuing up behind Ms Hughes to have their pensions invested in Cape Verde flats? (“Flat” being the operative word).
I could ask loads more pertinent and searching questions – like why did Ms Hughes’ public access barrister, Frances Ratcliffe of Radcliffe Chambers, think it was a good use of her considerable skills to defend an obvious pension scam? How drunk was the judge on the day? How many more people got scammed out of their pensions because of this abomination – and proof the law is not just an ass but a whole donkey farm?

Anyway, enough already. The damage was done in the Royal London v Hughes case. And now, hopefully, the door to justice has been opened in the Police Authority v Mr N case – as eloquently reported by Henry Tapper in his blog on 2.8.18. But there is a great deal more work to be done on this now: the scammers who organised and promoted the London Quantum scam need to be prosecuted and jailed; and the FCA-regulated firm – Gerard Associates – which gave the advice to the police officer (Mr N) needs to be sanctioned by the FCA. Gerard Associates – run by Stephen Ward’s associate Gary Barlow – also needs to refund the £5k they charged Mr N – and indeed all of the £220k they charged the 98 London Quantum victims.

Now is the time to bring to justice not only the pension scammers, but also the negligent ceding pension trustees who allowed the scammers to succeed – and facilitated financial crime.

At the time Mr N was scammed by Stephen Ward; Viva Costa International (the “introducers”); and FCA-regulated advisers Gerard Associates, the Pensions Regulator’s “Scorpion” campaign was in full flow. But it was unbelievably inept. It only really talked about liberation and ignored the many other kinds of fraud being perpetrated at the time – i.e. investment fraud.

The London Quantum pension scam came hard on the heels of the Capita Oak and Henley scams – which straddled the Scorpion watershed of February 2013. The transfer administration for Capita Oak was done by Stephen Ward of Premier Pension Solutions (Spain) and Premier Pension Transfers (Worsley, Manchester). Ward knew from first-hand experience how ceding trustees were starting – albeit agonisingly slowly and gradually – to resist transfer requests.

Here is evidence of the first tentative – and very inconsistent – moves to do some long-overdue diligence on pension transfer requests – as reported by Stephen Ward’s team of transfer administration scammers:

24.4.2013 – ReAssure Pensions – “The scheme now want the client’s application and new-dated screenshot emailed to Alan (Fowler – Ward’s pension lawyer chum) – on hold at Tom’s (Biggar – XXXX XXXX’s mate) request”.

11.4.2013 – Prudential – “Transfer canceled as per XXXX (XXXX XXXX’s wife)”

26.4.2013 – Zurich – “Unwilling to process – not sure why – need to cancel”

11.7.2013 – Zurich – “On hold as there may be an issue with Scorpion”

26.4.2013 – Friends Life – “Awaiting trust scheme rules – with Anthony (Salih – Ward’s mate) – need to cancel”

30.5.2013 – Aviva, NHS, Co-op, Friends Life – “Schemes are refusing to transfer”

11.6.2013 – Scottish Life – “Scheme contacting client – believed not transferring”

However, during this same period, there were plenty of transfers being made in defiance or ignorance of Scorpion. These included ceding schemes NHS (£43k), Scottish Widows (£25k), LGPS Newham (£47k), Aviva (£54k), Xerox £92k, Zurich (£21k), Prudential (£25k) and Standard Life (£53k).

But the most worrying was the Firefighters Pension Scheme: £69K after the following notes were made:

“Advised that the trustees committee are meeting to discuss cases and we are awaiting a call back next week. Transfer sent today 2.7.13 and paid on 16.8.13. Statement sent to XXXX and Tom (Biggar)”.

So the Firefighters were no better than the Police Authority in terms of ignoring the Scorpion warning.

And here is what the Scorpion warning was saying from 2013 onwards – and, indeed, was still saying in 2016 when the last couple of hundred Continental Wealth Management victims were in the process of being scammed:

Predators Stalk Your Pension

Companies are singling out savers like you and claiming that they can help you cash in your pension early. If you agree to this you could face a tax bill of more than half your pension savings.

Don’t let your pension become prey.

Pension loans or cash incentives are being used alongside misleading information to entice savers as the number of pension scams increases. This activity is known as ‘pension liberation fraud’ and it’s on the increase in the UK.

In rare cases – such as terminal illness – it is possible to access funds before age 55 from your current pension scheme. But for the majority, promises of early cash will be bogus and are likely to result in serious tax consequences.

What to watch out for?
1. Being approached out of the blue, over the phone or via text message
2. Pushy advisers or ‘introducers’ who offer upfront cash incentives
3. Companies that offer a ‘loan’, ‘savings advance’ or cash back’ from your pension
4. Not being informed about the potential tax consequences
Five steps to avoid becoming a victim
1. Never give out financial or personal information to a cold caller
2. Find out about the company’s background through information online. Any financial advisers should be registered with the FCA
3. Ask for a statement showing how your pension will be paid at retirement and question who will look after your money until then
4. Speak to an adviser that is not associated with the proposal you’ve received, for unbiased advice
5. Never be rushed into agreeing to a pension transfer
If you think you may have been made an offer, contact Action Fraud.

But, the Scorpion warning failed tragically in so many different ways:
- The warning only talked about liberation. Many victims thought this warning didn’t apply to them as they had no intention of liberating their pension fund
- No information was given on how to find out about a company’s background – and how to establish whether it was regulated
- The warning talked about advisers being FCA regulated – but ignored the question of offshore advisers who obviously wouldn’t be FCA regulated
- The public was advised to contact Action Fraud – but did not disclose that Action Fraud would do absolutely nothing
In 2015, we went to see the Pensions Regulator to talk about the failings of the Scorpion campaign – as well as the failings of the Regulator. Two Ark victims and I met the then Executive Director for Regulatory Policy – Tinky Winky. Our intention was to explain to him how the Scorpion campaign had failed and how it needed to be made more robust and comprehensive.

Tinky Winky, flanked by two lawyers and a paralegal, told us to “hop it” – and warned us that if we tried to interfere with the authority of the powers of the regulator, our arse would be grass and he’d be a lawnmower. A year later the Scorpion warning had still not been updated or improved and hundreds more victims lost their life savings.

The Pensions Ombudsman is, naturally, the hero of the hour in the Mr N v Police Authority case. And hopefully, he will find for the rest of the victims if they all now bring complaints against their negligent ceding trustees in the London Quantum case. But we must remember that, contrary to what the Ombudsman’s service has said for the past few years, the industry did know about pension scams long before the Scorpion Campaign in February 2013.

In fact, a clear warning had been given in 2010. The Pensions Regulator had been fully aware that since 1999 pension scams were on the increase, and yet did not make it clear to ceding pension trustees what their statutory obligations were in respect of transferring victims into scams. On 13.7.2010, tPR Chair David Norgrove stated that: “Any administrator who simply ticks a box and allows the transfer, post July 2010, is failing in their duty as a trustee and as such are liable to compensate the beneficiary.”

But pension trustees claim they never read that message (let alone heeded it) and that it was neither publicised nor distributed. Further, in the same year Tony King, the Pensions Ombudsman, reported that he had “found that pension trustees failed in carrying out serious fiduciary responsibilities to others in circumstances in which the law specifically states that they should not be protected from liability.” And still tPR did nothing. And the Pension Schemes Act 1993 was not amended to reflect the urgent need to protect the public.

The Pensions Regulator’s predecessor – OPRA (Occupational Pensions Regulatory Authority) had warned about the dangers of pension scams years before 2013 – as had HMRC. The last thing I want to do is criticise the Ombudsman – as this must be his hour of glory and we must all be hugely grateful to him. Especially Mr N and his fellow London Quantum victims. But we must remember that the industry in general, and pension trustees in particular, should have been alert to pension scams long before Scorpion.

Now is the time to bring to justice not only the pension scammers, but also the negligent ceding pension trustees who allowed the scammers to succeed – and facilitated financial crime.
August 7, 2018
Generali, an utter disgrace, merging with Utmost Wealth

Utmost Wealth and Generali PanEurope are set to merge with the help of Life Company Consolidation Group (LCCG). The plan is to re-brand as Utmost PanEurope. I wonder if this merger will do its utmost to ensure they manage and mitigate their future victims´ – sorry clients´ – risks, and protect their investments – as they certainly didn´t do so for their victims who suffered at the hands of CWM.

GPE chief executive Paul Gillett added: “We are proud of our performance over the last 20 years and have grown into one of the largest international companies in Ireland, with assets under management of over €10bn.

What a disgrace that Gillett can announce that he is “proud” of their performance over the last 20 years – proud of the misery and stress caused to the victims of the CWM pension scam? Proud of the fact that Generali have refused to take ANY responsibility for their victims´ losses.

Gillett goes on to say:

“The sale of the business to LCCG marks a very important step in our future development. Together, we represent one of the leading European providers of cross border wealth and corporate risk solutions with the potential to grow further across both current and new markets.”

With the responsibility of Generali being passed over to LCCG, here at Pension Life, we wonder if LCCG will be taking responsibility for Generali´s past victims as well. Will LCCG apply their corporate risk solutions to those who have already been put at risk? Generali on their own certainly didn´t apply a high standard of risk solutions when they placed CWM victims´ funds into high-risk, toxic, professional-investor-only structured notes.

Lets hope Utmost Wealth will do their utmost to sort out this utter disgrace caused by Generali´s negligence.

August 6, 2018
TV licence enforcement versus unlicensed advisers

Pension Life campaigns for awareness of corrupt financial advisers and advisory firms operating without the correct licences. Outing theses advisers and firms, in the hope that the authorities will do something about the state of it all, is one way of bringing these scammers to justice and warning the public. A recent article in the Irish News about an unpaid TV licence caught my eye. I feel I must highlight the injustice of the fact that a disabled woman was prosecuted for not having a TV licence while dozens of serial pension scammers get away with scamming their victims out of their hard-earned pension funds daily without ever getting punished.

Grandmother Anne Smith (left) from Poleglass with her friend and neighbour Marie Flynn. Picture by Mal McCann

IN reports –

Ill grandmother sent to jail for not paying TV licence fines

As we reside in Spain, we are fortunate enough not to have to pay for this licence, but readers who live in the UK and Ireland (and I believe Germany) will be well aware of the fees one MUST pay if they have a television in their home. For those that don’t live in a jurisdiction that requires a TV licence, here´s what Wikipedia states about an Irish TV licence:

In Ireland, a television licence is required for any address at which there is a television set. Since 2016, the annual licence fee is €160. Revenue is collected by An Post, the Irish postal service. The bulk of the fee is used to fund Raidió Teilifís Éireann (RTÉ), the state broadcaster.

Television licensing in the Republic of Ireland – Wikipedia

Irish police found time to visit Anne Smith (59 – who suffers from the debilitating lung condition COPD, as well as osteoporosis and is waiting for a double hip replacement, several times to issue a warrant for her arrest and later to take her into custody. Anne’s TV licence had been left unpaid for quite some time due to her poor health.

Non payment of a TV licence (when a television set is used within a house) is a criminal offence, and non-payment results in a police warrant being issued. Furthermore, men with vans are employed to visit all households on their database that do not pay their TV licence and basically harass them into proving they do not have a TV. It is just assumed that anyone without a TV licence is guilty, and so a campaign of harassment begins by letters and visits to intimidate people into buying a licence.

The Journal.ie reported earlier this year that there had been a rise in the purchase of TV licences in Ireland by * 8,000:

‘In a bid to clamp down on those who do not have a licence, the minister rolled out a raft of measures, including a communications campaign, as well issuing a new tender for a new TV licence agent tasked with carrying out TV licence inspections.

A spokesperson for the department said their research shows that the public campaign gave a definite push in the number of TV licences purchased. One tagline used in the ads where it highlights that buying a TV licence “is the law” resulted in a definite spike in take-up rates, they added.’

Can you imagine if this much effort was put into ensuring that financial advisers were fully licensed and qualified? And if the police chased after all the pension scammers? In my opinion, it is far more important to ensure that the financial services industry is operating in a fully legal and licensed manner. However, it is not so and the priority is obviously TV licence defaulters rather than pension scammers.

Serial pension scammers manage to create scam after scam after scam, posing as licensed advisers – convincing victims that they work for regulated firms – these scammers con millions out of innocent, hard-working victims every year!

And the problem is that the authorities, the FCA, HMRC and even the police just sit idly by and let the unlicensed advisers scam time and time AND TIME AGAIN!

August 6, 2018
London Quantum pension scam – Ombudsman finds Police Guilty
Pensions Ombudsman’s Determination – Justice for Police Victim

Among the flood of apathy, laziness and callousness by ceding pension trustees since at least 2010, we now have a Pensions Ombudsman’s determination which will hopefully result in more trustees being brought to account – and more victims getting justice.

The London Quantum victim who made the complaint to the Pensions Ombudsman – Mr. N – is a serving police officer with the Northumbria Police Authority. In October 2014, he was scammed out of his Police final salary pension scheme and into Stephen Ward’s pension scam: London Quantum.

It is worth noting that, in May of 2014, I went to London and handed HMRC evidence of Stephen Ward’s various pension scams – including his pension administration and trustee firm: Dorrixo Alliance (the trustee for London Quantum). But HMRC did nothing – and hence Mr N (along with 97 other victims) got scammed into London Quantum just a few months later. The fact that if HMRC had done its job this would have been prevented is an absolute disgrace.

It is also worth noting that HMRC met with Stephen Ward in February 2011 to discuss the Ark pension scam – so they were fully aware back then that Ward was heavily involved with pension fraud. And yet they cheerfully registered pension schemes such as Hammerley for his firm Dorrixo Alliance which was registered at his UK address: 31 Memorial Road, Worsley.

We have warned about the significant dangers of unregulated firms, unqualified advisers, bogus occupational schemes, toxic investments and liberation fraud for years. Yet still, the ceding trustees have stubbornly ignored us – and also ignored the Pensions Regulator’s Scorpion campaign (published in February 2013).

And now the chickens have come home to roost thanks to the Pensions Ombudsman’s determination in Mr N’s favour – and hopefully this will bring to justice to more victims of negligence by similarly lazy trustees.

Highlights from the Pensions Ombudsman’s determination are quoted below – with my comments in bold. First, however, it is important to understand the background and put the Police Authority’s negligence into context.

In 2010/11, dozens of trustees handed over £ millions to the Ark scam. The worst offender in the personal pension sector was Standard Life; the worst offender in the DB sector was Royal Mail – by a royal mile. We were denied permission to bring complaints to the Pensions Ombudsman as the Ark transfers were effected prior to February 2013 – the date the Pensions Regulator’s “Scorpion” warning was published.

And this, of course, was a great shame. Because Standard Life and Royal Mail – along with dozens of other negligent trustees – went on to hand over more £ millions and ruin thousands more lives. Three of the other worst-performing personal pension trustees in the subsequent Capita Oak and Westminster scams (now under investigation by the Serious Fraud Office) were Scottish Widows and Prudential.

None of these lazy, box-ticking ceding providers has ever paid redress to their victims (to our knowledge). Further, in the case of Royal Mail, PASA (Pension Administration Standards Association) has given Royal Mail trustees not one but two accreditations – despite the fact that they have never compensated any of their members for handing over their pensions to the scammers.

Before we look at the determination, let us look at a depressingly common thread which runs through these pension scams.
- In 2010/11, Stephen Ward (Level 6 qualified, former pensions examiner) was promoting and administering the Ark pension liberation scam. 486 victims lost £27 million worth of pensions and face £ millions in tax charges. The schemes are now in the hands of Dalriada Trustees and Stephen Ward has never been prosecuted. Dozens of ceding providers handed over hundreds of personal and occupational pensions without question.
- In 2012, Stephen Ward was promoting and administering the Evergreen New Zealand QROPS/Marazion liberation scam. 300 victims lost £10 million worth of pensions and face £ millions in tax charges. The scheme is now being wound up and Stephen Ward has never been prosecuted. Dozens of ceding providers handed over hundreds of personal and occupational pensions without question.
- In 2012/13, Stephen Ward was administering the Capita Oak liberation scam (now under investigation by the Serious Fraud Office). 300 victims lost £10 million worth of pensions and face £ millions in tax charges. The scheme is now in the hands of Dalriada Trustees and Stephen Ward has never been prosecuted. Dozens of ceding providers handed over hundreds of personal and occupational pensions without question.
- In 2013, Stephen Ward was administering the Westminster liberation scam (now under investigation by the Serious Fraud Office). 200 victims lost £7 million worth of pensions and face £ millions in tax charges. The scheme is now in the hands of Dalriada Trustees and Stephen Ward has never been prosecuted. Dozens of ceding providers handed over hundreds of personal and occupational pensions without question.
- In 2014, Stephen Ward was promoting and administering the London Quantum pension scam. 100 victims lost £3 million worth of pensions. The scheme is now in the hands of Dalriada Trustees and Stephen Ward has never been prosecuted. Dozens of ceding providers handed over hundreds of personal and occupational pensions without question.
I apologise if the above is somewhat repetitive. I did omit the dozen or so other schemes that Stephen Ward was also promoting which might have mixed it up a bit – as none of these is in the hands of Dalriada (yet).

Ombudsman’s Determination Applicant Mr N Scheme The Police Pension Scheme (the Scheme) Respondent Northumbria Police Authority (the Authority) Complaint Summary

https://www.pensions-ombudsman.org.uk/wp-content/uploads/PO-12763.pdf

“Mr N” (a serving Police officer) complained that the (Police) Authority transferred his pension fund to a new pension scheme (the London Quantum scam) without having conducted adequate checks in relation to the receiving scheme, and failed to provide him with a sufficient warning as required by the Pensions Regulator.

Mr N did indeed complain – and has been complaining for four years. To put his complaint into context, he was advised to make the transfer by a regulated advisory firm: Gerard Associates – run by Gary Barlow. Both the firm and Mr Barlow are on the FCA register. Barlow is also Level 4 qualified with the CII http://www.cii.co.uk/web/app/membersearch/MemberSearch.aspx?endstem=1&q=n&n=gary+barlow&c=&ch=0&p=0

The complaint is upheld against the Authority because it failed to conduct adequate checks and enquiries in relation to Mr N’s new pension scheme; to send Mr N the Pensions Regulator’s transfer fraud warning leaflet; and to engage directly with Mr N regarding the concerns it should have had with his transfer request, had it properly assessed it.

The ceding provider in Mr N’s case – the Police Authority – has been denying for almost four years that they were negligent (well they would – wouldn’t they!). But surely, of all providers, the Police pension trustee ought to have known better. The Police were involved in Project Bloom – the multi-agency project including regulators, police authorities and HMRC that aimed to combat pension fraud.

In February 2013, the Pensions Regulator issued an action pack for pension professionals headed “Pension liberation fraud – The predators stalking pension transfers”. This said that: “Government enforcement agencies and advisory services have worked to produce a short leaflet that you (the ceding pension trustee) can use to help pension scheme members understand the risks and warning signs of pension liberation fraud.

But, of course, the Police Authority – along with hundreds of other ceding providers – totally ignored this warning and doomed thousands of victims to financial ruin by cheerfully handing over victims’ pensions to the scammers.

Mr N received a phone call from Viva Costa International, an unregulated introducer of work to independent financial advisers, and was referred to Gerard Associates Limited (Gerard), a firm of financial advisers.

The unregulated “introducer” has been the scourge of financial services in the UK and offshore for years. They con victims into believing they are some kind of qualified and regulated “adviser”, but in fact they are nothing more than slimy salesmen chasing commission. Of even greater concern, however, was the fact that there was an FCA-regulated firm – Gerard Associates – involved in this scam. Gerard Associates, run by CII qualified Gary Barlow, had a track record of working with Stephen Ward of Premier Pension Solutions – helping him with his various pension scams.

The London Quantum Retirement Benefit Scheme (London Quantum) was subsequently recommended to Mr N. Based on the information available, London Quantum appears to be a defined contribution occupational pension scheme established in 2012. The sole sponsoring employer of London Quantum was Quantum Investment Management Solutions LLP, based in offices in London. That company is now in liquidation. London Quantum was originally administered by Dorrixo Alliance (UK) Limited (Dorrixo). Dorrixo became the trustee of London Quantum in 2014.

London Quantum was, in fact, a bogus occupational scheme. Dorrixo Alliance was a firm run by Stephen Ward of Premier Pension Solutions and used for a variety of his pension scams.

Gerard took a fee of nearly £5,000 out of the transfer payment. On 11 November 2014, Mr N received confirmation that the transferred funds had been invested. In 2015, Mr N looked again at the documents that he had been given in 2014, and was concerned to note that he had signed up to a high risk investment as a sophisticated investor. He was unable to obtain satisfactory responses from Gerard or Dorrixo about this.

(Note: Gerard have never refunded the £5,000 to Mr N – and, presumably, have held on to the fees charged to the other 97 victims). This is entirely typical of how pension scams work. Mr N was in fact invested in high-risk, toxic, illiquid, speculative funds which were totally unsuitable for a pension fund. The only parties who benefited from this transaction were the scammers themselves, as they would have received high investment introduction commissions. The investments included:
- Quantum PYX Management FX Fund – risky and illiquid forex trading
- Park First – UK airport car parking spaces
- Best Asset Management – Dubai car parking spaces
- The Resort Group – holiday properties in Cape Verde
- Reforestation Group – eucalyptus plantations
- Colonial Capital (three-year bonds in distressed US property)
- ABC Alpha (four-year bonds in business centres)
Most of these assets would have paid commissions to the scammers of up to 30%.

LONDON QUANTUM (DORRIXO ALLIANCE) INVESTMENTS

I note that Mr N’s transfer request was received by the Authority in November 2013, nine months after the Pensions Regulator’s pension liberation fraud guidance of February 2013 was issued, and his transfer was completed in August 2014. The pensions industry was aware of pension scams before the scorpion warning was published.

It is ironic – as well as extremely sad – that the Police Authority took no notice of the regulator’s fraud warning. And the victim who paid the price for this disgusting negligence was a serving police officer.

The Authority has admitted that it did not send Mr N a copy of the scorpion warning. The scorpion warnings were designed to be sent individually to scheme members. So, I am satisfied that maladministration has occurred.

It is indeed utterly disgusting that the Police Authority failed to send one of their own officers (who was indeed contemplating a transfer) a copy of the scorpion warning.

The next question is whether the Authority only had to send the scorpion warning to Mr N, or should have done more. I consider that it should have done more. I accept that when Mr N made his transfer request London Quantum was not a new scheme. However, the Authority ignored a number of features which other pension schemes identified as potential ‘red flags’ and accordingly refused transfer requests to that arrangement. These included that London Quantum was sponsored by a dormant company that was registered at an address far removed from the scheme member.

It has long been a disgrace that ceding providers have allowed members to transfer to a bogus occupational scheme – the sponsor of which neither traded nor employed anybody (or ever intended to do so). Justice Morgan’s overturning of a Pensions Ombudsman’s determination in the Hughes v Royal London case appalled the industry and the public. Morgan determined that a member only had to have earnings – rather than earnings with the sponsor of the scheme.

The Authority was fully aware, however, that although Mr N was a deferred member of the Scheme he was still employed as a policeman in Northumberland and he was still living in that county. The question of why he was requesting a transfer to an occupational pension scheme sponsored by a company that he did not work for, and based at the other end of the country, appears not to have concerned the Authority. I consider that the Authority should have had concerns about London Quantum, even the name might have rung alarm bells for a North-Eastern employer, and therefore it should have made some enquiries about London Quantum before it allowed the transfer to be made. Unfortunately, it failed to do so.

The Authority took the view that Mr N’s proposed transfer had none of the features of a potential pension transfer scam. However, I do not agree. In several previous determinations, we set out the type of due diligence expected of transferring schemes.

Within 28 days of the date of this Determination the Authority shall reinstate Mr N’s accrued benefits in the Scheme and pay Mr N £1,000 to reflect the materially significant distress and inconvenience that he has suffered as a result of the Authority not making appropriate checks in respect of London Quantum, and not giving Mr N the appropriate warnings.

Hopefully, now the Ombudsman will find in favour of thousands of other victims of pension scams facilitated by negligent, lazy, box-ticking ceding providers. However, the £1,000 “compensation” (for distress and inconvenience) order by the determination does not scratch the surface in terms of making up for the ordeal that Mr N has gone through. And he has suffered this profound torment while protecting the British public in the North East of England this past few years.
August 2, 2018
10 essential questions for offshore advisers
Pension Life is working towards making offshore financial advisers more transparent. We have created a list of 10 essential questions for offshore advisers and their preferred answers. For too long precious pension funds been left in the hands of unqualified, unregistered advisers and unregulated financial advisory firms.

Offshore advisers need to follow a strict set of rules just as UK-based ones do. Being offshore doesn’t mean you can invent your own set of rules for financial advice. However, it seems more and more people are being poorly and illegally advised in the transfer of their pension funds.

Offshore advisers often use unnecessary insurance bonds to skim extra commissions without disclosing these commissions prior to the pension transfer. It is clear more information needs to be available to the clients of these ill-advised pension transfers. With greater transparency, pension holders would be able to make better informed decisions about advisers to whom they entrust their transfers. Also, they will have better knowledge of how to spot a pension scammer.

With so many advisory firms out there, it is hard to know when your inner beacon should be flashing a bright red warning light telling you to just walk away. Pension Life has put together this list of 10 essential questions to ask your offshore adviser.

If their answer points to the red warning light walk away – FAST!
1. What are your qualifications – are you qualified to give advice on pension transfers? and what CPD have you done recently? Advisers giving advice on pensions must be qualified to a certain level. Click on the link above to read what these requirements are. Simply having a qualification isn´t enough. Advisers must be qualified to the correct level and they must have made an effort to complete the relevant continued professional development (CPD). In addition they must pay their membership fees to the institute with which they qualified.
2. Is the company you work for regulated for insurance and investments? If the answer to this question is NO – walk away – DO NOT take any financial advice from them. All companies who give financial advice on pension MUST be licenced to do this by being regulated for both. An insurance licence is not sufficient.
3. Compliance. Is there a robust compliance department staffed by qualified personnel? If the answer is no walk away.
4. Do you use insurance bonds? If the answer to this is YES – walk away. If your pension goes into a SIPPS or a QROPS, it does not need two wrappers and therefore an insurance bond is just another way of the adviser making more money out of your fund though commissions – hence draining the value of your pension fund.
5. Do you use structured notes, UCIS funds or in-house funds? If the answer to this is YES – walk away. Structured notes are for ´professional investors only´; they are high-risk and not suitable for a pension which is classed as a retail investment that should be placed into a low-medium risk investment.
6. Do you use a reputable firm for DB transfers? If the answer is NO walk away.
7. Do you carry out a detailed fact-find to establish a client´s risk profile? If the answer is NO walk away.
8. Do you disclose all the fees and commissions at the start? Often we hear of pension scam victims who have been told by their adviser that their pension review is free and no other fees or commissions are mentioned during the transfer process. Once that transfer has completed the clients look at the pension fund value and find that a large chunk has been taken to cover various ´costs´. Every pension fund transfer will have some reasonable charges. However, many scammers apply extra charges and fees that are far above what is reasonable and proportionate. These are often undisclosed. Make sure that your adviser is able to provide – in writing – all of the costs. Once you have these details, you will be able to make an informed decision as to whether you are happy for the transfer to proceed.
9. Do your clients get regular updates on the progress of their funds and have full access to check this for themselves? You should be able to check the progress of your pension whenever you want. However, a good adviser should provide you with a quarterly update. This should include any charges or fees incurred and any profit/loss made. A yearly review should also be carried out to ensure your pension fund is steadily growing with the right investments.
10. How do you deal with customer complaints?
If your offshore adviser refuses to answer the questions or skims around an answer – just walk away. Anyone offering pension advice should adhere to certain criteria and he must be ready and willing to provide you with all the information you ask for. He should be fully transparent about all the details involved with your pension transfer.

Once you have ensured that your adviser is fully qualified and regulated, and operates in a manner that is within your pension fund´s best interests, we would advise you to check out our other blog:

10 essential questions to ask an IFA

This blog covers pension options in a bit more detail.
July 25, 2018
10 essential questions to ask an IFA
Most victims of pension and investment scams bitterly regret not having asked more questions with regards to their financial planning. The problem is that they wouldn’t have known what questions to ask, and they probably wouldn’t have understood the answers even if they had. Pension Life offer you 10 essential questions to ask an IFA so you can ensure you are not the next victim.

All existing victims wish they had asked questions, obtained assurances, checked advisers’ qualifications and regulation. But, of course, it is now too late for the victims who have lost part or all of their life savings.

These victims all agree that it is important to prevent future victims. This is why we have come up with these 10 essential questions to ask an IFA, when considering financial planning and the transfer of your pension:

1 – How is the adviser and/or his firm licensed to provide advice to you in the jurisdiction where you – the client – live? Don’t be fobbed off with the answer that the adviser has an insurance license – that isn’t enough. The adviser needs an investment license. Also, don’t be fobbed off if the adviser says the firm is licensed in another jurisdiction – it needs to be licensed for where you, the client, live.

2 – If you are transferring a DB (defined benefit) or FS (final salary) scheme, you must get FCA regulated, qualified, independent advice on the merits of the transfer. Remember, the advice might be that you are better off leaving your pension where it is.

3 – Make sure the transfer recommendation (from a DB or FS scheme) is correct. Get a second opinion. You only get to do this once – and if the wrong road is chosen, it is very difficult (if not impossible) to correct it.

Check that the transfer advice report makes it clear that you, the client, are being advised on the transfer and that the advice is about what you should do – not what you could do.

4 – Don’t let the adviser put you into an insurance bond. Examples of these are Old Mutual International, SEB, Generali, Friends Provident, RL360, Hansard, Investors Trust. An insurance bond is a wrapper. A QROPS is a wrapper. You don’t need two wrappers. That’s like Superman wearing two pairs of pants over his tights.

The only purpose an insurance bond serves is to pay the IFA 8% commission. Plus, the insurance bond will tie you in for between five and ten years, and you neither need nor want to do that with a pension.

Insurance companies will take business from any old unlicensed, unqualified scammers. They don’t care. The quarterly charges are called “management charges” but that is very misleading because they don’t do any actual managing. Once the value of your fund starts to diminish because of the high charges and the toxic, illiquid, high-risk investments, the insurance company will keep taking its fees – sometimes until the whole fund is extinguished and worthless.

5 – What qualifications does the adviser have?

You wouldn’t take medical advice from an unqualified person posing as a doctor; legal advice from an unqualified person posing as a solicitor or accountancy advice from a person posing as an accountant. So why take financial adviser from someone with no qualifications?

It is a sad fact that in many jurisdictions, so-called advisers spring up with no qualifications and even no Financial Panning experience. Sometimes, they had been selling mortgages, second-hand cars or ice cream the previous week to selling pensions.

Pension Life covered the question of qualifications in a recent blog by Kim:

Using advice from Chartered Global about financial qualifications, you can discover that:
Level 3 Financial Adviser Qualifications

The most basic or entrance tier is the certificate level which is classed as a level 3 qualification within the UK framework, equivalent to A levels. Level 3 qualifications include:

CertCII: Certificate in Financial Planning issued by the Chartered Insurance Institute

CertPFS: Certificate in Financial Planning issued by the Personal Finance Society

CeFA: Certificate in Financial Advice issued by the Institute of Financial Services

Cert IM: Certificate in Investment Management issued by the Chartered Institute for Securities & Investment

Level 3 qualifications are sometimes held by adviser office staff and certain mortgage or protection advisers in a bank for example. These certificates require passing a selection of exams over 1-2 years and holders will have a general grounding in financial planning and financial services.
Level 4 Financial Adviser Qualifications

However, since 2012 financial advisers in the UK have been required to hold a minimum of a level 4 qualification to be able to continue to provide independent financial planning advice. The minimum required qualification to provide independent financial planning advice in the UK is now the diploma level, a level 4 professional qualification.

Look for the following letters or designations to identify a level 4 adviser:

DipCII: Diploma in Financial Planning issued by the CII

DipPFS: Diploma in Financial Planning issued by the PFS

DipFA: Diploma in Financial Advice issued by the IFS

IAD: Investment Advice Diploma issued by the Chartered Institute for Securities & Investment

Building on the certificate knowledge, level 4 advisers will offer a well-rounded understanding of financial planning and products, from general investments, structured products, to basic pension, protection, tax and savings advice.
Level 6 Financial Adviser Qualifications

A full two levels higher are the profession’s top tier of financial advisers; holders of level 6 qualifications equivalent to a bachelor honours degree. Completing a comprehensive suite of professional exams over many years, these top-flight advisers will be designated through one of the following:

APFS: Advanced Diploma in Financial Planning issued by the CII

CFPCM: Certified Financial Planner

Adv DipFA: Advanced Diploma in Financial Advice issued by the IFS

Advisers at this level will have advanced expertise in the main areas of general financial planning.
6 – Is the adviser planning on investing your life savings in professional-investor-only structured notes?

Structured notes are complex, risky, expensive derivatives which are only suitable for sophisticated investors who understand them. Few advisers/brokers understand them – but love them because of the very high commissions they pay. They also love them because once they have purchased them, there is no management to do – only stand back and watch them plummet in value.

Examples of structured note providers are Leonteq (currently being sued by Old Mutual International for fraud), Commerzbank, Royal Bank of Canada and Nomura. There are, of course, many more out there.

However, if your adviser/broker says he wants to invest part of your life savings in structured notes – ignore any old baloney about “capital protection” – and RUN LIKE HELL!

7 – Why are the firm’s own in-house funds used? An adviser can’t be independent if he is recommending his own firm’s own funds.

The way that financial advice is supposed to work is the adviser does a thorough, detailed fact find to analyse the client’s individual circumstances and risk profile. Then the adviser can go out into the market and find the most suitable and cost-effective investment products.

There is a huge choice and many good low-cost investment platforms. But some firms set up their “own” funds – which are merely somebody else’s fund which has been “white labelled” as the firm’s fund. This means there are two layers of charges.

An adviser cannot be independent if he is advising that his own fund should be the investment choice. This recommendation is usually made because of the extra commission which can be earned from an in-house fund, rather than because it is in the client’s best interests.

8 – Are UCIS funds going to be used?

Many a poor victim has lived to regret his trust and faith in a silver-tongued adviser’s ability to manage his investments. UCIS funds (Unregulated, collective investment schemes) are inevitably high risk and can have catastrophic results.

Such funds include EEA Life Settlements, LM, Harlequin, Brandeaux Student Accommodation, Premier New Earth Recycling, Dolphin Trust and many more which are sometimes no more than Ponzi schemes. Underlying assets include forestry, “clean” energy, eucalyptus and truffle-tree plantations, chia seeds, fine art, wines and speculative property.

Life savings have been decimated by failed UCIS funds – make sure your adviser/broker understands you don’t want your money to be invested in any of these toxic, high-risk, unregulated funds. You could well be promised high returns, but you have to remember that with high returns comes high risk.

9 – What is the full extent of the charges/fees/commissions on the entire transaction?

So many advisers conceal the full extent of ALL the fees and commissions. Victims only find out about them long after it is way too late. The “drag” on a fund can be catastrophic, even without investment losses.

If you are being advised to go into a QROPS, there will be the set-up and yearly ongoing charge (as well as exit charge); the adviser will charge between 2% and 3% set-up and then 1% (at least) annually; if UCIS funds are used, these can pay up to 25% commission (or even more sometimes); if structured notes are used, these can pay between 6% (for the regular ones) and 8% (for the fraudulent Leonteq ones). Then there is the 8% on the insurance bond. Then there is anything else the adviser can slip in without you noticing.

Victims of poor advice often only notice the dragging effect of all these charges on their fund after a year or so – or more. And by then it is too late, and the fund can never recover.

10 – Why were you graded as a “7” balanced investor – or even higher as an “adventurous” investor (when, clearly, you should have been graded as a low-risk investor)?

Here is the basic problem – the higher an investor’s risk profile is, the riskier the investments can be. This, of course, means that the riskier the investments are, the more commission the adviser can make.

After suffering crippling losses, many victims (retrospectively) look at their statements and documentation and find that they were graded as medium or high risk without their knowledge or consent. The adviser’s excuse is that the client valued growth above all else and that this was reflected in the risk assessment questionnaire.

Often, clients start off as low to medium risk, and then the adviser surreptitiously increases the risk profile. This can have catastrophic consequences for investors – and is what ALL of the known victims report as being the cause of their crippling losses.

The bottom line is that the public needs to be educated and warned about the bad practices offshore. Only by spreading the word about what happened to existing victims, will future victims be prevented.

People who have lost part – or all – of their pensions and life savings, are devastated and destroyed. They are facing potential poverty in retirement. Some will lose their homes, their health and their relationships. Some will take their own lives.
June 25, 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
FCA Pension Scams

I like to have a good relationship with regulators. And believe me I have tried really really hard with the FCA. I didn’t have much of a relationship with the Pensions Regulator in the past. I asked for a meeting with Tinky Winky, tPR’s former executive director. He turned up with two lawyers (in case one blew away I guess) and a paralegal in an aptly-named conference room called the Warwick Suite at a hotel at Gatwick airport.

Winky accused me of bombarding him with emails (about the Capita Oak scam). I counted them: 16 over an 8-week period. My calculator said that was approximately two per week.

Then he threatened me for “tipping off” and said I could be prosecuted; then the uglier of his two lawyers threatened me with unspecified action if I didn’t wind my neck in. She said to me in a rather unpleasant manner “we can have you sent to the Tower you know – we have wide-ranging powers”.

Anyway, our little tea party in the stuffy room didn’t exactly make for a good spirit between us. So I sighed a huge sigh of relief when Winky departed tPR a year or so later and went to work for LGPS (one of the ceding providers who had performed so appallingly in Ark, Capita Oak and Westminster – handing over £ millions to the scammers without batting an eyelid).

I am happy to say I have a good relationship with Lesley Titcomb – Head of tPR – and am grateful to Henry Tapper for facilitating this.

But, back to the FCA. I went to see John Thorpe at the FCA a couple of years ago – with a rather thin colleague of mine who is a Chartered Financial Planner. John was very enthusiastic about working with us and asked me to give him any intel I had on scams and scammers. He said he would ensure all information would be passed on to the relevant people. However, he did warn me not to deluge him with emails and said: “not more than two or three a week please”.

But then John got moved to another department, which was disappointing. Since then I have sent dozens of complaints to the FCA – as have a number of my associates including IFAs, trustees, compliance officers, chartered financial planners and victims. But the firms in question are left unsanctioned. And the non-compliant practices continue unabated – and more victims are ruined on a daily basis.

In 2016, Jeremy Donaghy-Sutton (a senior airline captain and safety instructor) and I got together in London. He suggested we propose to the FCA an air-crash-style investigation and reporting system to analyse the causes of scams, prevent them from recurring and taking the appropriate action against those responsible for failures. Mostly his brilliant work, we finished and printed off our proposal and set off for the FCA offices.

I had called ahead and told them we would be coming and that we would like to hand our proposal, report and a series of complaints to an appropriate person. I said it was important that we had a brief chat so that we could explain the purpose of our visit (me plus an actual victim) and the accompanying documentation.

We got to the FCA’s North Colonnade office and went to reception. There I explained who I was, what I wanted, who and what I had with me. A very pleasant lady, flanked by two security guards, said “Oh, but we don’t see people here”. Her English wasn’t too bad, but I did wonder whether she hadn’t quite understood what I had said. So I tried again, and went into some detail about the fact that the person I had previously spoken to at the FCA had said that someone would indeed come down and see us.

But her English seemed to get worse the second time. And she still insisted that nobody would come to see us and accept the documents. I tried a third time, while Jeremy sat in the waiting area chuckling quietly as he could see and hear my fuse getting shorter and shorter.

This time the nice lady said she would get someone to speak to me on the phone and asked me to sit down for a few minutes while she got through to somebody. Jeremy and I sat watching the ghastly moving picture on the reception wall – and I wondered what on earth had inspired such a weird and inappropriate piece of “art” (and what the artist had been on at the time).

After about ten minutes, I was summoned back to the reception desk and the nice lady handed me a phone. I have no idea who the man on the other end of the line was, and not much idea whether he was speaking in English or some weird combination of Mandarin, Yiddish and Czech.

When I eventually got my head and ears around his weird accent, I realised he wanted me to explain – over the phone – who I was and what I wanted. By this time there were about twenty people hanging around in the reception area – so this extremely confidential complaint and report proposal was announced loudly and publicly as my voice got higher, squeakier and louder.

I had to spell out some words several times as the man’s English seemed to get worse as the agonisingly painful conversation dragged on and on. When I had finished, exhausted and wondering if this was all a bad dream, the man said “OK, hand your documents into the post room”. We duly dropped the bulging envelope into the tiny little room just outside the entrance to the FCA building. I assume it was all shredded as we never even got an acknowledgement.

Afterwards, over a quick lunch in a Thai restaurant just up the road from the FCA, Jeremy and I wondered if what had happened had all been just a bad dream. How could such a thing happen in a supposedly civilised and well-regulated country. But then Jeremy himself had spent the past five years wondering how the Ark “thing” had been allowed to happen.

The very things I warned about back in 2016 are still happening and victims’ pensions are being routinely destroyed – both in the UK and offshore. At the Transparency Task Force Symposium in November 2017, one victim stood up and related a remarkably similar story to mine about his treatment by FCA. The delegates – who included pension trustees, solicitors, police officers, victims and the wonderful Andy Agathangelou – were stunned and disgusted.

So, if anybody knows anyone at the FCA who might like to do a bit of regulating no more than twice a week, could they please let me know?

Here is the video Pension Life constructed with the help of Jeremy Donaghy-Sutton (a senior airline captain and safety instructor and Ark victim)

What is a Pension Scam?

May 16, 2018
Introduction: Anatomy of a Pension Scam
£11,000,000,000. That is an awfully big number. But this is what financial fraud of pension and investment scamming cost thousands of victims in 2016 according to reported statistics. This begs the urgent question: why have so few – if any – of them been prosecuted?

The Pensions Regulator’s Lesley Titcomb has now officially and publicly declared that scammers are criminals.

Pension Life´s book: Anatomy of a Pension Scam is going to be made into a series of blogs. The purpose of the book is to get the message out there and warn the public; the financial services industry in the UK and offshore; governments; regulators; ombudsmen; crime agencies, HMRC, and the scammers that this huge-scale financial crime will NO LONGER BE TOLERATED. The authorities who have stood by and allowed this to happen have to snap out of their complacency, laziness and incompetence, and actually take some action to bring these criminals to justice.

What we need now is all of the scammers behind bars and the keys thrown away.

The actions of these fraudsters have shaken the confidence in the pensions and investment industry as a whole. Not to mention the harm it has inflicted upon innocent, hard-working people on a huge scale.

Evidence suggests that in the past seven years, there have been many £ billions lost to pension and investment scams – there are no precise “official” figures. But the dreadful fact is that the scammers who were targeting victims back in 2010, continued doing it in 2011; and 2012; and 2013; and 2014; and 2015, and 2016. And they are still doing it today. Happily and profitably. And nobody has stopped them or brought them to account for the horrific financial damage and distress they have caused.

With this in mind it is hard to decide who is the devil himself, the vicious, greedy, cold-hearted scammers or the feeble authorities who let them get away with it. REPEATEDLY!

HMRC were warned by the industry about the potential for scams if the role of compulsory professional trustee was removed pre 2006. In a letter of March 2004, Nick White, specialist pension solicitor warned: “It is essential that schemes offering self-administration and wide investment choice should have in place an independent person who has sufficient control of scheme assets to prevent abuse and sufficient knowledge and experience to know abuse when he sees it.

That does not necessarily mean that the system of pension trustees should be retained in its current form but, if it is abolished without an effective replacement, we envisage that within the next 5 years the degree of abuse of such schemes by both incompetent and dishonest individuals will:
- further stain the reputation of pensions generally; and
- severely embarrass the government responsible for letting it happen
Reputable professionals in the industry and the Government share a common aim of building a system of tax rules that is simple but is robust enough to last for a working lifetime without major overhaul. Such a system needs to contain adequate protections against abuse.”

Nick White’s warning was brought to my attention by Martin Tilley who is director of technical services at Dentons Pension Management. Martin has written some excellent blogs and articles on the subject of pension scams and my favourite has to be this one:

http://www.retirement-planner.co.uk/9344/cleaning-up-pension-scams-with-soap-operas

Either way the one thing we can be sure of is that it has to stop NOW.

So watch this space as we at Pension Life, prepare a documentary series about pension and investment scams. There are many victims who would be only too happy to help recreate the exact wording – both written and verbal – of the scammers’ pitch. With their help we hope to create a military-style, zero tolerance campaign to wage against all the guilty parties until every last one of them is brought to justice.
May 15, 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
Pension liberation scammers of Successful Pensions JAILED

Two pension liberation scammers have been sentenced to time behind bars AND a recovery of funds after creating an elaborate pension liberation scam, involving around 23 victims and nearly 1 million pounds of pension funds. Successful Pensions sure was unsuccessful for all involved.

Anthony Locke, 33, from Christchurch in the UK, was sentenced to a five-year jail term, after being found guilty of 23 counts of fraud by false representation and three counts of money laundering.

Ray King, 54, who was employed by Lock, was also found guilty at the trial of 14 counts of fraud by false representation and given a three-year jail sentence.

FT Adviser reported:

“According to investigating officer Paul Sullivan, of Dorset Police, between September 2013 and April 2014 Mr Locke obtained almost £1m from various pension companies, which represented the ‘pension pots’ of the victims in this case”.

A timetable was set out for Proceeds of Crime Act proceedings in relation to the recovery of funds from the defendants.

Successful Pensions, Lock’s company, allegedly created an ‘elaborate façade’ comprising of hundreds of documents to convince genuine companies, including Friends Life and Virgin Money, that they were operating a genuine occupational pension scheme.

Successful Pensions, set up a website to attract people who were interested in pension liberation. The victims were given a 50% cash payout on their funds’ total worth, with the other half to be re-invested – reportedly in eco-friendly investment schemes.

Unfortunately, there were no investments. Rather than cream large commissions by reinvesting the funds into high-risk toxic assets (which most scammers do), they instead laundered the money into offshore accounts including Lock’s Mum’s account and his ex-partner’s!

The scammers then went on to live the life of Riley with the victims’ money. They treated themselves to an Aston Martin Vantage, Porsche 911 and Mercedes B180, along with lots of other luxury items and nice holidays.

Paul Sullivan also stated:

“Not only have the victims lost half their pensions but now may face financial penalties from HMRC (Her Majesty’s Revenue and Customs) who will want to recover the lost tax (on the pension liberation).

The sentences imposed send out a clear message to fraudsters who perpetrate these types of offences.”

This is indeed positive news. But the message it sends out isn’t good enough. These fraudsters were clearly not very bright and made no attempt at smoke and mirrors. They scammed 23 people out of nearly £1 million. What about those in other schemes that scammed hundreds and sometimes even thousands of victims out of many £ millions? And did so repeatedly.

To my mind, the message sent out is that only the stupid scammers who don’t aim high get caught and punished. The more clever and cunning ones get away unscathed time and time again. And are left free and unfettered to enjoy their expensive lifestyles at the expense of their victims.

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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, get all the information in writing and get a third party to check the details.

If you have been the victim of a scam hear how Pension Life member Jessica M.J. who lost two thirds of her pension to Continental Wealth Management, talks about dealing with stress.

May 1, 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.

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May 1, 2018