Tag: RBC

SEB LIFE (OR DEATH) – WILL THE CENTRAL BANK OF IRELAND BRING THEM TO JUSTICE?

One of the hundreds of Continental Wealth Management victims stuck in a useless and expensive SEB Life International bond, and ruined by crippling investment losses, has made a detailed complaint to SEB.

Some idiot from SEB called Orla Golden has replied – and the response is astonishing. Below are my answers to this ridiculous rebuttal. The complaint will now be referred to the Central Bank of Ireland – asking that SEB Life should be suspended. I will also copy this in to the Financial Services Ombudsman.

Let us see whether the regulator and ombudsman in Ireland will turn out to be as useless as the regulator in Gibraltar, or will actually have some teeth. If the authorities in Ireland are any good, hopefully they will hold Conor McCarthy and Peder Nateus fully responsible for facilitating this deplorable scam.

LETTER FROM ORLA GOLDEN TO THE CWM/SEB VICTIM IN RESPONSE TO HIS COMPLAINT (WITH MY COMMENTS IN BOLD):

We are writing to you in response to your recently submitted complaint in respect of your insurance policy with SEB Life International Assurance Company DAC that you placed through your appointed independent financial advisor, Inter-Alliance WorldNet Insurance Agents and Advisors Ltd.

The victims did not place any orders or instructions through Inter-Alliance. SEB is being not only disingenuous but dishonest here. The advisor in question was Continental Wealth Trust SL, trading as Continental Wealth Management SL (CWM) in Alicante Province, Spain. CWM was a firm full of unqualified so-called “advisers” with a track record of scamming, cold-calling and flogging dodgy products to unsuspecting victims. The victims appointed CWM as their advisers, and all the dealing instructions for the toxic structured notes came from CWM and not Inter-Alliance.

SEB Life is a designated activity company which is registered under company number 218391 with the Irish Companies Registration Office and is authorised as a life insurance undertaking by the Central Bank of Ireland under number C771.

So, let’s see just how good a regulator the Central Bank of Ireland really is. We must all hope it is not as hopeless, limp and corrupt as some of the other regulators.

SEB Life is permitted to distribute life insurance policies in Europe (EU) by way of a freedom of services passport issued by the Central Bank of Ireland under the Solvency II Directive 2009/138/EC as adopted into Irish law by the European Communities (Insurance and Reinsurance) Regulations 2015 (the “Solvency II Irish Regulations”). That may be true, but these weren’t true life insurance policies: they were bogus policies designed to act as “wrappers” for dodgy, rubbish investments and to facilitate financial crime in multiple European jurisdictions – most notably Spain where such insurance/investment products have been outlawed by the Spanish Supreme Court.

In January 2015, Inter-Alliance novated its business to Trafalgar International GmbH who became your financial advisor.

Not true. Trafalgar International did not become the financial adviser. Few, if any, of the victims had ever heard of Trafalgar until CWM collapsed in September 2017.

Trafalgar is an independent financial advisor located in Germany

No it isn’t – it is located in Cyprus. Orla Golden clearly has never done Geography.

and is authorised and entered into the register of insurance intermediaries maintained by the Chamber of Industry and Commerce (DIHK). Trafalgar is authorised to mediate insurance policies in various EU territories including UK, Spain, Malta and France. Yes, Trafalgar was. But CWM wasn’t.

SEB Life has terms of business with Trafalgar, and previously had terms of business with Inter-Alliance which was authorised by the Insurance Companies Control Service in Cyprus to mediate insurance policies in the EU; before it transferred to Trafalgar. Continental Wealth Management (CWM) was a sub agent of Inter-Alliance

Really? Sub agents are illegal in Spain

and then continued to be a sub-agent of Trafalgar.

No it did not. SEB is lying. CWM was never a sub agent of Trafalgar

CWM is the responsibility of Trafalgar and SEB Life does not have terms of business with them.

So why did SEB accept dealing instructions from CWM if they had no terms of business with the firm?

SEB Life regularly reviews the authorisation of independent financial advisors with whom they have terms of business,

SEB is failing to get its story straight. CWM was not authorised – ever, for anything. SEB may have had terms of business with both Inter-Alliance and Trafalgar, but CWM was never an authorised agent of either firm.

however, it is the independent advisor’s responsibility to comply with their own regulatory obligations for authorisation

And nothing to do with SEB? So, why did SEB accept dealing instructions from CWM?

and their regulatory authorities have oversight responsibilities.

Like the Central Bank of Ireland has oversight responsibilities over SEB? Let’s see how seriously it takes those responsibilities.

Trafalgar, as the appointed independent financial advisor is your agent.

No it isn’t, and wasn’t. Trafalgar was not an IFA firm, it was a network.

Any policy related intermediary commission was paid directly to Trafalgar (formerly Inter-Alliance), with whom SEB Life has terms of business.

So why was SEB paying intermediary commission at all to CWM which was not regulated at all for anything – not pet insurance, not bicycle insurance, nothing. It matters not to whom the commission was paid, the products were sold by an unregulated firm (CWM) and SEB should never have accepted the business – let alone ever paid commission (irrespective of to whom this commission was paid).

As your agent, Trafalgar must handle your complaint in accordance with their agent and regulatory responsibilities.

Trafalgar was never the victims’ agent.

In addition, the pre-sales advising process occurs between you as the policyholder and your appointed agent.

Trafalgar was never the appointed agent. Trafalgar did not provide the advice; Trafalgar did not place the dealing instructions; Trafalgar did not meet the clients.

This process identifies the customer’s needs, based on the information provided by the policyholder(s)

How would SEB know? Did they ever check the fact finds or make any attempt to ascertain the victims’ attitude to risk? No, of course they didn’t

and recommends the insurance product which best suits the customer’s objectives and needs.

This is a ludicrous comment to make. Not one single victim needed a bogus life assurance product – they were all, 100% mis-sold purely for the fat commissions paid by SEB.

SEB Life is not party to this pre-sales advising process and the discussions that occur between a policyholder and their appointed independent financial adviser as to their risk profile and the assets that will fulfill the investment needs and objectives.

Correct. But SEB ought to have noticed, over a period of several consecutive years, the inexorable losses from the toxic structured notes which repeatedly failed – and the dealing instructions for which (submitted by CWM and accepted by SEB) bore forged client signatures. SEB may not have been party to the pre-scamming advice con, but they should certainly have taken action when the results of this clear fraud started to become obvious.

SEB Life does not offer any investment advice, and this is clearly stated in the declaration section of the application form that we ensure is signed by the customer.

And damn good job too. Most victims would probably trust a convicted thief rather than SEB. The declaration section of the application form may make it clear that SEB does not offer investment advice, but the annual statements also make it clear that SEB can do maths. And that basic maths demonstrated that hundreds of policyholders’ funds were being routinely destroyed.

Our literature states that the amounts invested in the Units of the Fund in the contract are not guaranteed but are subject to fluctuations in value depending, in particular, on the performance of financial markets.

There is fluctuation, and then there is total destruction. Fluctuation goes up and down. Destruction just goes down. Did not a single half-wit at SEB notice the difference over a period of seven years?

The return on investment is not in SEB Life’s control and past performance is not an indicator of the future performance of any asset.

So, if Bloodstone Building in Dublin caught fire, would the blind, deaf and dumb idiots at SEB just sit there, shrug their shoulders and say “a fire in the building is not within our control – we aren’t firefighters. And we won’t even bother using the fire extinguishers or calling the fire brigade. We’ll just sit here and watch the building get destroyed and burn to death ourselves?”

SEB also request that a one-page “Statement of Understanding” is signed by a policyholder where an investment request is received in relation to a non-standard asset.

Really? Who told Orla Golden that? The Statement of Understanding Fairy? This simply is not true.

This is to confirm that the policyholder has read and understood the potential financial, market and liquidity risks associated with the asset before proceeding.

None of the victims understood the assets which SEB was permitting the scammers at CWM to churn; none of the victims realised or understood what structured notes; none of the victims knew that structured notes were for professional investors only and not for retail investors; none of the victims knew that they stood to lose part or all of their investment (as most did); none of the victims realised that SEB would just sit there and let the repeated losses keep happening as the unlicensed, unqualified scammers at CWM kept scamming away for seven years.

Policyholders are able to request that their policy be linked to assets that are within the company’s permissible asset list. The investments have been executed by SEB Life on the basis of written instructions submitted to SEB Life that were signed by you as the policyholder

No they weren’t – the signatures were forged

or your appointed investment advisor.

Meaning the unqualified, unlicensed scammers at CWM who did not have an investment license – let alone an insurance license.

SEB Life relief upon and implemented those instructions in good faith and in accordance with the terms and conditions of the policy.

There was nothing good about SEB’s “faith”. This particular victim – whose complaint has not been upheld by SEB – suffered the following losses between 2009 and 2015:

12 toxic, professional-investor-only structured notes from Nomura, RBC, Commerzbank, Leonteq and BNP Paribas:

Lost a total of 271,539 EUR

Investment in the Quadris Teak UCIS fund:

Lost 100,000 GBP

TOTAL LOSS IN SIX YEARS: 371,539 EUR

Didn’t SEB notice? Didn’t SEB care? Didn’t SEB do anything for seven years?

The answer, of course, is a resounding no. The lazy, callous, greedy, negligent did nothing except sit there and watch this victim’s life savings be destroyed by the scammers.

With regard to your allegations of regulatory breaches and fraud committed on your policy, SEB Life is unable to comment on such allegations and these must be discussed with your appointed financial advisor Trafalgar directly.

I have no doubt that SEB’s lawyers will have advised them to keep their mouths shut on this one and to try to deflect the blame onto Trafalgar. This is one of the things I hate about lawyers – even when they know their dirty clients are guilty they will still defend them to the hilt. As long as they keep billing, the lawyers won’t care how many lives their negligent and culpable clients ruin.

In these circumstances, you may wish to seek independent financial advice

I wonder what sort of “adviser” SEB have in mind? Scammers like CWM?

and/or legal advice regarding your engagements with your appointed financial adviser.

And I wonder what sort of law firm SEB would recommend? A dodgy firm like SEB’s own lawyers who are happy to make money out of defending the indefensible?

July 12, 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
OMI SUES LEONTEQ over undisclosed commissions

A fine journalist at International Investment reports that Old Mutual International is taking legal action against Leonteq. She reports that this action is being taken on the basis that Leonteq lied about commissions paid to advisers for using high-risk structured notes.

This news is, of course, very welcome news – especially if it succeeds in securing redress for the “significant financial losses” for the Continental Wealth Management victims. OMI has stated:

“Had the true level of commission been disclosed, the high-risk structured notes would not have passed Old Mutual International’s (OMI) criteria, and no investments would have been made”.

OMI has mentioned the “true level of commission”. What it is referring to is the fact that for some particularly toxic notes, the commission paid to the scammers was 8% instead of 6%. The victims ultimately pay this commission – which is always hidden from them – but in reality the difference between 8% and 6% pales into insignificance when compared to the actual losses themselves.

Leonteq’s high-risk structured notes had been failing and causing crippling losses for years. Just as RBC’s, Commerzbank’s and Nomura’s had also done. One victim saw his £38,000 pension pot dwindle down to £800 since 2015.

The truth of the matter is the none of the victims should have had any of their retirement savings invested in high-risk structured notes which clearly state on the term sheets:

FOR PROFESSIONAL INVESTORS ONLY

Continental Wealth Management – an unlicensed firm of scammers – bought more and more structured notes. CWM was not licensed for either insurance or investment advice.

But this raises an important question:

Why aren’t SEB and Generali suing Leonteq?

The SEB and Generali victims suffered very similar crippling losses to OMI’s. What are they doing about this fiasco? What would their “criteria” have done to intervene had they realised Leonteq was paying the scammers 8% instead of 6%?

Apparently, Leonteq is now disclosing commissions on the term sheets for their products. Great. Problem is that the victims never get to see the term sheets – or at least not until it is way too late and they have lost half of their life savings. Having had access to a Leonteq termsheet which clearly states:

This Product may only be sold to qualified investors (the term “qualified investor” has the meaning as defined in Section 10 of the Swiss Federal Act on Collective Investment Schemes “CISA”).

and

Given the complexity of the terms and conditions of this Product an investment is suitable only for experienced Investors who understand and are in a position to evaluate the risks associated with it.

But even if the victims had seen these warning and the fact that they were paying 6% or 8% – on high-risk structured notes – to have their fund systematically destroyed, what could these people have done about it? Because, at the end of the day, the client is not the client (apparently). The client is the life office. OMI, SEB and Generali are the legal owners of these dodgy structured notes. Or perhaps the trustee is the legal owner? Depends on who you ask and why – the answer is always different.

Fortunately for OMI clients – the MD of OMI – Peter Kenny – has said the company is “taking a firm stand against the behavior which has led to such devastating consequences”.

Kenny goes on to say that OMI “will do all that we can to bring to account those responsible.” And 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”.

The International Investment journalist ends her article with Kenny’s parting comment:

“I would encourage all industry participants to work together to eradicate poor practices once and for all.”

For some, however, the damage has already been done.

A life’s worth of savings has already been destroyed.

******************************************

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?

FOLLOW PENSION LIFE ON TWITTER TO KEEP UP WITH ALL THINGS PENSION RELATED, GOOD AND BAD.

April 12, 2018
QUILTER – A NEW HOBBY FOR OMI?

Quilter – Old Mutual International – new name to try to hide past crimes

QUILTER – A NEW HOBBY FOR OMI? OMI – Old Mutual International – needs to compensate thousands of victims of financial crime which they facilitated. I can’t make up my mind whether they are adopting the brand “Quilter” to attempt to shake off their sordid and toxic past, or whether they are actually taking up quilting.

If OMI really is going to become a quilter, it needs to make a quilt depicting all the criminals whose crimes it has facilitated for so many years. And all the victims who have lost part of or all of their life savings.

What OMI really needs to do is to get firmly behind the prosecution of the criminals – from whom they profited for many years. OMI must contribute to the cost of denouncing these criminals and ensuring they are given maximum prison sentences.

Also, OMI – Old Mutual – must stop allowing toxic, professional-investor-0nly structured notes in their bonds. Typically, these were provided by Commerzbank, Nomura, Leonteq and RBC. If Old Mutual International wants to gamble away its own money on these crap products, then be my guest. But don’t expose retail pension savers to these sordid, high-risk instruments – used by the scammers as mere tiles in a game of Scrabble.

Thanks to IFA Al Rush, there is now a criminal investigation into the hordes of vultures who preyed on the British Steelworkers. This has been eloquently reported by Henry Tapper in his blog about the police investigation at Port Talbot.

Al Rush championing the British Steelworkers who have been scammed

Al Rush has suggested the wording which victims can use to report those who scammed – or attempted to scam – them. And all of what Al and his colleagues have done has been done at their own expense and out of a sense of decency.

Hard to tell the difference between OMI and Quilter and Jabba The Hut

This is in stark and stinky contrast to OMI – Old Mutual International. Since 2011, OMI has sat and watched – like a cross between Jabba The Hut and a Black Widow Spider – while thousands of victims have seen their life savings dwindle away to very little or even nothing. And all the while, taking extortionate fees and paying commissions to the very scammers who ruined the victims in the first place.

So does OMI really think that adopting the name “Quilter” will make future victims fail to make the connection – that this is the same firm that took business from dozens of unregulated scammers such as Continental Wealth Management, Abbey Financial Solutions, Holborn Assets, Guardian Wealth Management, and other “chiringuitos”?

Perhaps the worst crime committed by OMI is not that they took business from unlicensed scammers; not that they allowed 100% of victims’ pension funds to be invested in professional-investor-only, high-risk structured notes; not that they sat there idly and negligently while the clients’ pensions and investments shrank inexorably……

Old Mutual International – the rubbish end of financial services

the worst of OMI’s crimes has been that when there are only a few crumbs left of a life-time’s retirement savings, they will still charge crippling early-exit penalties. OMI, or Skandia, or Quilter or Jabba The Hut or whatever the hell this toxic, evil shower call themselves, have no place in financial services. They have facilitated and profited from financial crime for years and benefited from the misery and ruin of thousands of victims.

In an attempt to emulate Al Rush’s suggested police report for British Steel victims at the hands of the various scammers who targeted, stalked and scammed them, here is my suggested report for OMI victims to make to the police and the regulators. Naturally, this will work equally well for victims of Generali, SEB, RL360, Friends Provident, Hansard, Investors Trust etc.

OMI must be sanctioned for facilitating financial crime

‘I was advised to transfer out of my personal/occupational (delete as appropriate) pension scheme and was lied to when I asked about how much money would be taken from me. I think, over time especially, I will lose/have already lost many tens of thousands of pounds (probably, hundreds of thousands of pounds) in fees which were hidden from me.

This will bleed my pot dry, leave me exposed to poverty in old age and create a burden on the local council.

I was specifically told there would be no penalties or lock-in periods.

Can you help me please, I would like to make a formal statement and help you bring charges against those who did this, and those who helped them’.

January 20, 2018
OMI? OMG! SAME OLD, SAME OLD MUTUAL – SAME OLD LIES
Old Mutual International (OMI) is at the heart of much of what is wrong with offshore financial services. The CWM debacle clearly evidences this.

OMI, formerly Skandia and soon to be Quilter, provided the vehicle used to wipe out thousands of victims’ life savings – not only in the CWM scam, but also with many other rogue financial advisers (often referred to by the Spanish regulator as “chiringuitos”).

OMI (Old Mutual International) is used as a bogus life assurance policy to “wrap” dodgy investments which subsequently nose dive and destroy portfolios.

The so-called “life wrapper” serves absolutely no purpose from the investors’ point of view, other than to pay exorbitant fees to OMI and the adviser (which is often not licensed to provide either insurance or investment advice). These fees, of course, mean that the victims’ pensions and investments never have a hope in hell of growing – or even maintaining their original value.

High-risk, illiquid, professional-investor-only structured notes bought with the victims’ retirement savings by rogue advisers (such as Continental Wealth Management – CWM) frequently fail – and sometimes are even fraudulent – so bring victims’ funds crashing down even further. In the case of the CWM debacle, the structured notes were mostly Commerzbank, Nomura, RBC and Leonteq, and many of the notes crashed – costing the victims millions of pounds.

OMI charged the victims the following fees:
- Regular Management Charge 1.15% for ten (yes – TEN!) years
- Admin Charge Eur 144.00 annually
- Early Surrender Charge 11.5% – reducing by 1.15% a year to nil after ten years
But did OMI do any actual “management”? No. They never monitored the losses, alerted the investors or offered to do anything to help stem the hemorrhaging of victims’ funds. OMI just sat there like a lazy, greedy, callous parasite and watched the victims’ retirement savings dwindle. OMI must have known that this would be condemning thousands of people to poverty in retirement and yet they obviously did not care two hoots.

Did they do any actual “admin”? Yes. They reported the losses and ever-shrinking funds. But they took no action to help the thousands of victims or prevent further losses.

Was it reasonable to tie victims into a useless, pointless insurance bond for ten years? After all, the bond clearly offered no protection or guarantee of the capital invested. And was it right to charge 11.5% for the privilege of losing huge proportions of the funds? No, absolutely not. In law, a pension scheme member has a right to transfer and needs the flexibility to alter their pension arrangements whenever they need to. Being tied into a useless and expensive insurance bond FOR TEN YEARS is the last thing a retirement saver needs.

In the wake of this appalling tragedy, what has OMI done to put things right?

Has OMI offered to pay compensation to the victims?

NOPE

Has OMI offered to rebate its (extortionate) charges?

NOPE

Has OMI offered to waive the punitive exit fees for those who want to try to rescue what’s left?

NOPE

Has OMI lowered the 25% barrier so that ruined and desperate victims can access some income to avoid starving to death?

NOPE

Has OMI learned anything whatsoever from the CWM debacle? Has it turned over a new leaf and stopped accepting business from unlicensed scammers such as CWM? Has it stopped making exorbitant charges which drag retirement savings down? Has it stopped paying huge commissions to scammers to encourage them to destroy thousands of victims life savings? Has it stopped allowing and promoting toxic structured notes?

The answer to all of the above is a resounding NO. OMI knew exactly what terrible fate it was condemning the victims to for the past seven years.

OMI knew that the victims could face losing significant parts of their retirement savings – and stood by while it happened. Well, not exactly just stood by – they made huge profits in the process.

Has OMI learned anything from this tragedy? Has it turned over a new leaf? Absolutely not. In November 2017, it was still offering – and even aggressively pushing – structured notes to financial advisers and offering meaty commissions – obviously trying to replicate the huge success it made out of the Continental Wealth Management scam. On 30th November 2017, OMI sent out a bulk email to advisers:

From: Old Mutual International mail: intmarketing@engage.omwealth.com]

Dear Greedy Broker, HURRY HURRY HURRY! SPECIAL OFFER ON STRUCTURED NOTES TO FLOG TO UNSUSPECTING VICTIMS. GET YOUR RUNNING SHOES ON – THIS OFFER CLOSES 15TH DECEMBER 2017. WE NEED MORE UNSUSPECTING MUGS LIKE THE CWM VICTIMS SO WE CAN MAKE MORE HUGE PROFITS AND CONDEMN MORE PEOPLE TO POVERTY IN RETIREMENT.

“The latest, tranche of structured products provided by BNP Paribas is available now through our portfolio bonds. But you don’t have long to get business in – this tranche will now close on 15th December 2017.

The products on offer during this tranche are:

Global Equity Income 5 – with a five year term paying quarterly income of 6% a year in USD or 5% a year in GBP – capital at risk product

Global Equity Autocall 9 – autocall product with a six year term paying 10% a year in USD or 8.25% a year in GBP – capital at risk product

Multi-Asset Diversified Global Certificate 10 – with a five year term and 100% capital protection

Full details, including how to access the products, are on our dedicated structured products page.”

Notes pay initial commission of 5.88% to Old Mutual of which 4.69% is paid to the adviser. OMI pockets 1.19%. No wonder OMI are pushing this!

The BNP Paribas “handbook” spouts the same old same old rubbish that CWM was using to con around 1,000 victims out of their retirement savings between 2011 and 2017:

“Structured Products are investments that are fully
customised to meet specific objectives such as capital
protection, diversification, yield enhancement, leverage,
regular income, tax/regulation optimisation and
access to non-traditional asset classes, amongst others.
The strength of a Structured Product lies in its
flexibility and tailored investment approach.
In their simplest form, Structured Products offer
investors full or partial capital protection coupled
with an equity-linked performance and a variable
degree of leverage. They are commonly used as a
portfolio enhancement tool to increase returns
while limiting the risk of loss of capital.”

The hundreds of CWM victims know that this is all lies: with structured notes, there is no capital protection; no flexibility; no portfolio enhancement; no increased returns and no limit to the risk of loss of capital. Shame on BNP Paribas for helping OMI to dupe more victims into losing their retirement savings and facing financial ruin.

So, the message to the public is:

DON’T TOUCH OMI – OLD MUTUAL INTERNATIONAL – WITH A BARGEPOLE

DON’T TOUCH STRUCTURED NOTES IN GENERAL WITH A BARGEPOLE

DON’T TOUCH STRUCTURED NOTES BY BNP PARIBAS WITH A BARGEPOLE

DON’T BELIEVE THE LIES TOLD BY ROGUE FINANCIAL ADVISERS, OMI OR BNP PARIBAS

DON’T BECOME ANOTHER VICTIM OF THE INSURANCE BOND/STRUCTURED NOTE SCAM

Lastly, OMI’s self-congratulating rubbish on their website crows about their “customer principles” and the many awards they have won. An example of this is the following statement:

Giving good service to financial advisers and their clients is at the heart of our business. We work hard to constantly improve our standards in this area. Our track record speaks for itself.

And yes, OMI’s track record does speak for itself – and anyone who does even the most basic maths will inevitably say “Oh My God!”.

And BNP Paribas’ claim that “a Structured Product lies” sums it all up nicely.
January 7, 2018