Tag: Royal Bank of Canada

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

18^th February 2019

DEATH OF THE LIFE BOND:

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

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

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

Why should the use of life bonds be strictly controlled?

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

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

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

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

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

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

Chief Inspector of Unit – Ministry of Economy and Enterprise

Secretary of State for the Economy and Business Support

General Directorate of Insurance and Pension Funds (DGS)

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

THE DEATH OF THE LIFE BOND

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

The ethical sector of the financial advice industry will, of course, be delighted – and there will be a mad scramble by the rogues to find a way round this ruling. And they will fail.
February 18, 2019
Nitwit or Dragonfly? Gambling or Investing?

Nitwit or Dragonfly? Gambling or Investing? Are investment losses as a result of a bad adviser or a bad investment? Or both? The real question is: how does the consumer tell the difference? A favourite episode of Fawlty Towers involved Basil’s ill-fated bet on a racehorse called Dragonfly. Confusion sets in – fuelled by the easily-confused Manuel – and “Dragonfly” gets muddled up with “Nitwit”. And that is how clients get confused just as easily: by advisers who spout the usual rubbish: capital protected; guaranteed returns; blue-chip investments; solid providers etc. They just leave out the three most important things: the fat commissions paid to the adviser; the high-risk nature of the “investment” and the fact that structured notes are FOR PROFESSIONAL INVESTORS ONLY (and not for retail investors).

Equally befuddled – but much less funny – this past few days, has been a bunch of nitwits posing as financial experts on Linkedin. Almost as barmy as Basil and Manuel, these comedians don’t know the difference between investing and gambling. Graham Bentley of a firm called gbi2 has been suggesting that structured notes should be revisited as viable “investments” for valued clients.

Bentley has suggested that structured products are an option that advisers could consider including in their portfolio of investment solutions. If he is talking about outright scammers, then – of course – he is right. Structured products pay juicy commissions of up to 8%, so naturally they are a favoured product for these criminals to sell. Plus, if the clients themselves have so much money they are desperate to get rid of as much of it as possible, as quickly as possible, then structured products are ideal.

But Bentley is missing the point entirely. Structured products have, for years, been sold enthusiastically and aggressively by the usual suspects: Leonteq, Nomura, Commerzbank, Royal Bank of Canada and BNP Paribas; bought by scammers such as Continental Wealth Management for the juicy commissions; harboured by crooked life offices such as Old Mutual International. And the result has been huge losses for hundreds of victims. In some cases, total destruction of a victim’s life savings.

Most advisers who sell these toxic products are too thick to understand how they work – and indeed anything beyond the amount of commission they earn out of flogging them is way too tricky to get their simple minds around. And why should they even bother? They just sell them, collect their 8% and then move on to the next victim. What’s to understand? They know that life offices love them – and indeed Old Mutual International bought £94 million worth of the fraudulent Leonteq ones alone. It is a delightful circle for all concerned: the scammers get rich, the bent life offices get fat and the structured product providers do very nicely thank you. And not a single one of them gives a second thought for the victims.

One cheerful idiot on the Linkedin thread has enthusiastically supported Bentley’s idiotic view:

Mark Coomber, Chartered MCSI Independent Financial Planner at Plutus Wealth Management

“Continue to use structured products (as part of portfolios) both personally and for clients with great success. Most of the negative comments I read about them are born out of ignorance and sheer laziness of some advisers who cannot be bothered to either learn the topic matter or undertake the relevant due diligence.”

And this guy is chartered! As a member of the CISI he should know better than to spout such rubbish – and I feel deeply sorry for any clients of Plutus Wealth Management as they are clearly in danger of being sold these toxic products. In fact, I would go further and suggest the public should be warned about the dangers of using this firm, as Coomber clearly has every intention of flogging his victims these high-risk products. If he is stupid enough to use them for his own gambling fun, good luck to him. But he has no right to inflict them on retail clients.

One of the fraudulent structured notes sold by Leonteq (for 8% commissions to the scammers) was:

Capital Protection on WTI Crude Oil with a Reference Bond (PDVSA)
100.00% Contingent Capital Protection | Credit Risk of Reference Bond Issuer | 5.00% p.a. Guaranteed
Coupon | 6.00% p.a. Conditional Coupon
ISIN CH0234862669 | Swiss Security Number 23486266
Final Fixing Date 20/03/2019

The term sheet did, to be fair, give a clear warning:

“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.”

Sadly, we have to wait until March 2019 to find out how many victims have lost their shirts on this particular lame horse.

And this is the problem: most advisers don’t understand structured products themselves – all they understand (and care about) is the fat commission. They certainly don’t care that the products are fraudulent. But, more importantly, none of these rogue advisers’ clients are experienced investors. If they were, they wouldn’t be paying a greedy and irresponsible financial adviser to risk their hard-earned life savings for them.

STRUCTURED NOTES ARE GAMBLING – NOT INVESTING!

So my message to Coomber and Bentley is this: read Leonteq’s term sheet:

“Products involve a high degree of risk, including the potential risk of expiring worthless. Potential Investors should be prepared in certain circumstances to sustain a total loss of the capital invested to purchase this Product.” And then try to decide which horse is going to win: Dragonfly or Nitwit.

October 3, 2018
Cartoon blog – Don’t be the next pension scam victim

Written by Kim

All pension and investment scams have one thing in common: if the pension scam victims had asked the offshore advisers some or all of these 10 essential questions, they might not have lost their life savings to the scammers.

Here at Pension Life, we are working hard to help educate the masses and stop pension scammers in their tracks worldwide. By arming and informing the public, and teaching them how to spot the scammers and avoid being scammed, we can help put a stop to these crimes.

With the scammers outsmarted, there will hopefully be fewer pension scam victims!

We have put together this cartoon which provides you, the investor, with 10 essential questions to ask your offshore adviser before you sign your precious pension fund over. Knowing what questions to ask could mean you do not become the next pension scam victim.

1. Pension Life has covered what qualifications your adviser needs to give pension advice. The adviser should also be able to show you their certificates and be registered with the governing body that awarded them – typically CII or CISI qualifications. We have created a series of blogs “firm name – qualified and registered?” which cover many offshore advisory firms and their team members. They show the firms that list employees who claim qualifications but are not registered and have failed to supplied proof and which firms are transparent. Some firms are happy to work with us and be 100% transparent and demonstrate that their team of advisers are fully qualified and registered.

2. Many offshore companies are regulated with an insurance licence ONLY and this is not sufficient to give pension and investment advice. They must have a licence to give advice on pensions and investments.

3. We have seen many companies with flash websites posing as financial advisory firms. Their spiel gives the impression they are a large company, but when you dig deeper you find they are a one-man band like the Imperius Group, and often unqualified AND unregulated like Callaghan QROPS.

4. Insurance bonds are an expensive and unnecessary double wrapper on your pension. If it has already been invested in a SIPPS or a QROPS, insurance bonds are not needed. Insurance bonds are another way for the scammers to skim more commissions from your fund, putting a dent in your start and end value. Life offices such as Old Mutual International, Generali and RL360 are among the firms (known as life offices) to be avoided.

5. Structured note providers such as Leonteq, Nomura, Royal Bank of Canada and Commerzbank should be avoided. These companies are linked to previous pension scams and many victims have seen their pension funds destroyed with these high-risk, fixed-term notes, that are totally unsuitable for a pension fund. Often these structured notes have high commissions that make the ‘adviser’ big bucks.

6. Holding a DB pension puts you in good stead for your retirement. With a pension fund like this you are often better to ‘just do nothing’ and leave it as it is. Transferring it can lead to heavy charges and fees, meaning your fund becomes worth much less than before.

7. A pension is classed as a retail investment and needs to be invested in low to medium risk investments with a steady increase in value. Offers of high returns, especially in investments that use words like “renewable energies” or “property”, are illiquid and high risk. These types of investments are not safe for your pension. An example of this is the Elysian bio-fuels pension scam, facilitated by James Hay and Dolphin Trust – a German housing investment scheme – promoted to British steelworkers.

8. Time and time again, we see pension scam victims receiving the paperwork on the pension transfer ‘deal’ they have signed, only to realise that large fees and charges have been applied. The scammers are experts at hiding the charges and often quote the term: ‘free pension review’. Whilst they do not charge for all their visits and advice before you sign on the dotted line, they make up for this in transfer fees, commissions and often quarterly charges too! The quarterly charges will be applied no matter how your fund is doing. We have seen pension scam victims´ funds end up in negative equity due to being placed into an inappropriate fund which causes losses and second, continuing fees being applied. (Fees are normally based on the start value of the fund).

9. With the technology we have today, like smart phone apps, many firms are offering instant access to the progress of your pension fund through their own app. Options exist to add funds or change your investments and total transparency of investments and progress; a company that offers this service is Pension Bee. You should also get quarterly statements and annual reviews so you can track the progress of your fund.

10. We have seen pension scam victims repeatedly contacting their so-called advisers to try to get information on the demise of their fund, only to meet dead end after dead end. Again, ensure you are using a fully licensed firm that has an admin, compliance and support team. Ensure you are able to get a set of contact details (if not two!) and that there is a ‘real’ address and a landline – scammers often use PO boxes and mobile numbers.

Remember, it is your pension and your investment; you are entitled to ask as many questions as you like. These essential questions to ask offshore advisers should be simple for any trustworthy and transparent adviser to answer quickly and effortlessly. If your adviser is in any way cagey, vague or tries to avoid the question altogether, just walk away. An adviser who is unwilling to be totally transparent could well be a scammer.

Don’t be the next pension scam victim – wise up!

October 2, 2018
YET ANOTHER STRUCTURED NOTE SCAM BY OLD MUTUAL INTERNATIONAL

ROLL UP! ROLL UP! ME HEARTY SCAMMERS! OMI’S LATEST STRUCTURED NOTE SCAM IS ONLY AVAILABLE UNTIL SEPTEMBER 28TH SO GET A JIGGLE ON WHILE STOCKS OF THIS TOXIC CRAP LAST! WE ARE PROUD TO OFFER OUR VALUED SCAMMERS YET ANOTHER INVESTMENT SCAM

BY OLD MUTUAL INTERNATIONAL.

This wonderful investment scamming opportunity with OMI, is open to all scammers – you need no qualifications and don’t have to be regulated. If you want a bit of training in how to sell this rubbish inappropriate structured product to as many victims as possible, we can give you a quick five-minute whisper behind the bike shed. But, trust me, it is easypeasylemonsqueezy – just lie. Tell the victims about the “guaranteed 10% return” bit, but don’t tell them about the “capital at risk” bit.

So, what are you waiting for? You’ll earn 8% by selling your victims a useless OMI “PORTFOLIO” bond (don’t mention this is illegal in Spain) and then a further 8% from selling this toxic, high-risk BNP Paribas structured note (rubbish inappropriate structured product) which will tie your victims in for six years.

This will give you plenty of time to explain away the losses as “only secondary market values” or “only paper losses”. And by the time your victims realise what you’ve done to them, you’ll be long gone. And most of them will commit suicide anyway, so they won’t be coming after you any time soon.

BNP Paribas has a good reputation as being an ethical, solid company so that will certainly help you with sell these inappropriate structured products. Just remember, tell the victims as little as possible about this product and hide the commissions you will earn – they will never find out and by the time their life savings have all gone up in smoke you will be sunning yourself on a Caribbean island, far away from the misery of those whose retirement income you will have destroyed.

If the victims are ever organised enough to band together and form a group action, I’ll just promise to pay redress for their losses, organise a meeting and then cancel it at the last minute. That ought to buy you enough time to make your getaway.

Happy scamming – smiley face. Love from Pete

p.s. BTW, don’t worry about the email below the Mad Woman of Spain has sent out – most of the new victims will never have heard of her and by the time they do, it will be too late. You’ve only got until 28th September to scam as many suckers as possible, so don’t just stand there – SCAM AWAY ME HEARTIES!

p.p.s. Don’t worry about my quote about inappropriate structured products – I was just lying (something I’m pretty good at). 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”

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ATTENTION PAUL EVANS – Head of Region – Middle East & Africa
Old Mutual International (International Structured Scam Specialists)

intmarketing@engage.omwealth.com

1st September 2018

Paul, are you completely mad? OMI has been offering and buying inappropriate structured products for years and facilitating financial crime by scammers such as Continental Wealth Management. OMI bought £94 million worth of fraudulent notes by Leonteq – which paid the scammers an extra 2% in commission. So you must have been accepting business and investment instructions from other scammers besides CWM for at least six years between 2012 and 2016 – as well as for years prior to and subsequent to this period.

And now you are offering more structured notes so scammers can line their pockets and ruin more victims? Read your own marketing material Mate:

“An autocall product with a six-year term paying at least 10% a year in USD or at least 7% a year in GBP. This is a capital at risk product.”

You are a pathetic and revolting human being. Which bit of CAPITAL AT RISK don’t you understand?? OMI has already disgraced itself by offering, buying and selling these totally inappropriate structured products – scam products -, and caused millions of pounds’ worth of destruction to innocent victims’ life savings.

You, Peter Kenny, Steve Braudo and Paul Feeney are all as bad as each other – and none of you should be working in financial services. Your conduct is utterly sickening: you are now proposing to ruin more lives and you still haven’t paid compensation for the lives you have destroyed already.

How much commission are you paying the scammers on these toxic products? 6%? 8%? 10%?

Instead of behaving with decency and dignity and honouring Old Mutual International’s promise to pay redress for OMI’s past failures, you are now preparing to launch a whole new tranche of financial crime and inappropriate structured products.

You are all disgusting and this needs to be exposed and all of you outed for the evil scum you are.

Angie

From: Paul Evans – Old Mutual International <intmarketing@engage.omwealth.com>
Subject: Competitive, transparent, simple – new tranche of structured products

September 1, 2018
Structured notes – knowing the risks

In many pension scams, we see the use of totally unsuitable, high-risk, for-professional-investor-only structured notes. These notes often offer the introducer high commissions. However, they are risky, fixed-term investments that often end in the loss of some – or even all – of the fund invested. Therefore, these types of investments are totally unsuitable for a pension fund. Firstly, let me explain what a structured note is, and then we can go through structured notes – knowing the risks.

So what the hell are structured notes? And why should retail investors say NO to them?

A structured note is an IOU from an investment bank that uses derivatives to create exposure to one or more investments. For example, you can have a structured note betting on the S&P 500 Price Index, the Emerging Market Price Index, or both. The combinations are almost limitless.

A pension fund is referred to as a retail investment, so it should be placed in a low to medium risk investment. Generally, structured notes are labeled high-risk, for professional investors only and, therefore, no pension fund should ever be invested into them.

Structured notes are frequently peddled by less-scrupulous financial advisers – as well as outright scammers – as a “high-yield, low-risk”, supposedly backdoor way to own stocks. However, regulators have warned that investors can get burned – which they frequently do. If the investment banks can flog it, they will make just about any toxic cocktail you can dream up. In reality, a structured note is an unsecured debt issued by a bank or brokerage firm – and the amount of money the investor might (or might not) get back is pegged to the performance of stocks or broad market indexes.

Say NO to structured notes for pensions!

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.

In the case of CWM, 1,000 people with 100 million pounds, were invested in structured notes and many of them lost large chunks of their funds. The CWM scam, headed by Darren Kirby, used structured notes with Commerzbank, Nomura, RBC and Leonteq, and many of the notes crashed.

John Rodgers fell victim to the CWM scam after being cold called by a salesman called Dean Stogsdill . His £202,000 pension pot was invested into high-risk, professional-investor-only structured notes referred to as “Blue Chip Notes”. Today John’s pension fund is worth just £60,000 (if he is lucky).

OMI help facilitate the unqualified, unlicensed and unregulated CWM scammers – victims of this scam were also tied into a useless, pointless insurance bond for ten years – courtesy of OMI. Whilst the value of these pension funds steadily plummeted, OMI stood idly by and watched it happen.

In the case of the Continental Wealth Management scam, the life offices – Old Mutual International, SEB and Generali, invested up to 1,000 victims’ life savings in structured notes. The majority of these toxic notes were from Commerzbank, Royal Bank of Canada, Nomura and Leonteq – some of which were, allegedly, fraudulent. Victims are facing huge losses – and a few have had their retirement savings wiped out entirely and a couple are now in negative territory due to the parasitic life offices continuing to take their quarterly fees (based on the original investment) as the investors are trapped into these spurious “bonds” for up to ten years.

We are now fighting to get the investors’ money back. But meanwhile, we must stress: do not use an advisory firm that uses structured notes. These toxic instruments are only for professional investors and should not EVER be used for ordinary, retail investors.

August 14, 2018
OMI IPO Profit Warning
OMI IPO Profit Warning – urgent please read carefully.

Old Mutual International (OMI) have entered into an IPO – initial public offering. This means they have become a public company rather than a private one. Frequent readers of Pension Life blogs will know that OMI have featured heavily in our recent blogs with regards to issues with structured note provider Leonteq, the selling of fraudulent notes and their involvement in the CWM pension scam.

But now it is very important that the public, and future potential victims of OMI, should be very wary of investing in this company. I have serious concerns about the undisclosed current liabilities and future drops in profits.

I would like to disclose some information about OMI post IPO. Hopefully, this information will reach prospective buyers before they make any purchases of OMI shares. Also, I can see no evidence that OMI have disclosed this information publicly to warn potential investors.

ABOUT OLD MUTUAL INTERNATIONAL (OMI)
- OMI – a company that happily uses high-risk, toxic, illiquid, professional-investor-only notes for pension holders’ funds
- OMI – a company that refuses to take any responsibility for buying totally unsuitable products which end up destroying innocent victims’ hard-earned retirement savings
- OMI IPO – a strategic move forward to make more money from the unsuspecting public – whilst sweeping their past misdemeanours under the carpet
First, let me explain a little more about what an IPO is:

An IPO means that the company can sell stock to the public. Therefore, if a company seems viable to the public, investments into it will be made and these investments will make the company a lot of money.

An IPO can be seen as an exit strategy for the original founders of the company. The shares that are being sold to the public would originally have belonged to the founders and early investors of the company.

An IPO is a way for the original founders to claw back monies they may have invested into the company at the outset.

“Why go public, then? Going public raises a great deal of money for the company in order for it to grow and expand. Private companies have many options to raise capital – such as borrowing, finding additional private investors, or by being acquired by another company. But, by far, the IPO option raises the largest sums of money for the company and its early investors.”
Information from https://www.investopedia.com/university/ipo/ipo.asp

This does, however, mean that:
- The Company (in this case OMI) becomes required to disclose financial, accounting, tax, and other business information
So I wonder if the OMI IPO has disclosed the following information to warn the public of underlying liabilities which will inevitably affect future profits and net asset value:

Between 2012 and 2016, OMI purchased £94m worth of fraudulent structured notes from Leonteq; presumably, a further £94m of non-fraudulent (but still unsuitable) notes from Leonteq; probably a further £94m worth each of Commerzbank, Royal Bank of Canada and Nomura (many of which performed as badly as the Leonteq fraudulent ones incidentally). Therefore, we could be looking at £470 million worth of structured notes with losses of at least £100 million – probably substantially more. And up to half of this could lie with the victims of the CWM scam.

The term sheets of the Leonteq notes clearly stated:

“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.”

and

“Products involve a high degree of risk, including the potential risk of expiring worthless. Potential Investors should be prepared in certain circumstances to sustain a total loss of the capital invested to purchase this Product.”

This information about OMI purchasing £94m worth of the fraudulent notes is not hearsay on my part – as is sometimes suggested in the comments on Pension Life’s blogs – any doubters can follow the link to the High Court of Justice of the Isle of Man Civil Division dated 20 March 2018 and read these details.

OMI IPO Profit Warning

It would seem that the OMI IPO is a way for the company to make more money or just get out of losing money. With the High Court proceedings hanging over their heads, there is a chance that they will find themselves heavily in debt if they are instructed to pay back the crippling losses involved.

Going public and selling their shares – what better way is there to avoid taking a massive hit and losing money. Just let more innocent victims buying these shares take the hit on OMI´s past mistakes.

How long can OMI continue to turn a blind eye to the toxic crap they sold – the pension funds they helped destroy? With High Court proceedings underway, alongside their IPO, surely it is only a matter of time before OMI will be forced to air their dirty laundry!

My biggest concern about OMI‘s provisional accounts for the period up to June 2018, is that there is no evidence of any provision for the substantial losses likely to be suffered as a result of buying so many toxic structured notes – including the fraudulent Leonteq ones. There could easily be up to half a billion pounds’ worth of structured note losses due to OMI’s negligence and incompetence. However, on top of this, there could easily be millions – if not billions – worth of toxic, failed UCIS funds which were offered on OMI’s platform. These dreadful funds included LM, Axiom, Mansion and other worthless and/or Ponzi schemes.

If I were a potential investor in OMI, I would ask myself why they haven’t used the £8.365 billion worth of profits they’ve just declared to compensate their thousands of victims who are facing crippling losses to their retirement funds. I would also think seriously about highly-likely sharp drops in OMI’s profits in the very near future. And if I were an investment adviser to any individual considering buying shares in OMI, I would firstly give them a dire profit warning, and secondly ask whether it is right to invest in such an unethical firm.
July 24, 2018
OLD MUTUAL INTERNATIONAL V LEONTEQ CASE MOVED TO LONDON

Old Mutual International filed a High Court application on 16^th March 2018.

On 20.3.18, Old Mutual obtained a judgment in the High Court of Justice of the Isle of Man (Case Reference 18/0012). His Honour The Deemster Doyle, First Deemster and Clerk of the Rolls delivered his determination to OMI’s lawyer, Elizabeth Simpson of Simcocks.

But now Leonteq has been successful in having the proceedings transferred from the IoM to London. This will considerably help Leonteq and hinder OMI.

OMI’s case is that they are the victims of a fraud. Between 2012 and 2016, OMI invested approximately £200,000,000 in structured notes sold by Leonteq. The purchase of these notes was “conducted” on the truthfulness of representations made by Leonteq as to the amount of fees and costs to be deducted from the investments. OMI’s case is that what Leonteq claimed was false and fraudulent. The investments performed poorly as a result of the excessive level of fees. The losses are currently estimated to be well over £20,000,000 (although it is expected that this will increase – especially with the current devasting share price falls due to Covid 19).

OMI’s case against Leonteq is on the basis of fraudulent misrepresentation, conspiracy, constructive trust, breach of fiduciary duty, knowing receipt, dishonest assistance and unjust enrichment.

Let us look in some detail at the above aspects of the case.

Leonteq Securities has gone from strength to strength since this fraud began – despite the disgrace of this criminal matter. Their net profit in the first half of 2018 was declared as £30.73 million, and turnover £104.31 million – up 36% on the previous year. My first question is: are they still selling ultra high-risk structured notes? My second question is: what was the difference between the “ordinary” notes which paid 6% commission to the scammers, and the fraudulent notes which paid 8% to the scammers. Were the latter 33% more risky? Looking at the victims’ statements, it is impossible to tell the difference between the 6% notes and the 8% ones. There is no obvious higher failure rate – they just all look equally dire.

Right in the middle of the OMI/Leonteq matter, it was announced in 2014 that two salesmen were going to be added to the London branch: Walter Treur and Anders Stromberg joined on 25/27 June 2014. Treur was ex Commerzbank – another provider of toxic structured notes which also failed dismally and caused catastrophic losses to the Continental Wealth Management’s victims – and Stromberg was ex JP Morgan and Credit Suisse (although he had been unemployed for some time).

Another Leonteq employee, Michael Hartweg, left his job as deputy chief executive to spend all his time flogging the new business of toxic structured notes.

So, it is clear that Leonteq was making a lot of money out of these products. But, the question remains: was Leonteq complicit in fraud – or were they blissfully ignorant and just grateful for the huge profits they were pulling in?

In my humble view, structured notes are like a lot of other products which – if properly sold and used – can, in some cases, be beneficial/useful/enjoyable/harmless, but – if irresponsibly or inappropriately sold – can be deadly. Examples are: tobacco; alcohol; pornography; rat poison; fireworks; painkillers; kitchen knives; peanuts; plastic bags; cannabis.

Structured notes are “FOR PROFESSIONAL INVESTORS ONLY AND NOT FOR RETAIL DISTRIBUTION AND WARN OF DANGER OF LOSING PART OR ALL OF AN INVESTOR’S CAPITAL”.

I wonder which bit of that OMI failed to understand. They bought £200 million quid’s worth of the fraudulent 8% notes – how much of the 6% ones did they buy? We know that a large chunk of these went to the Continental Wealth victims and caused devastating losses. But that was just Leonteq – there was also Commerzbank, Royal Bank of Canada, Nomura and BNP Paribas. And there wasn’t just OMI – there was SEB and Generali doing the same thing.

Let’s be honest, the whole thing was a fraud. In the Continental Wealth Management case, CWM was a fraud; the structured notes were a fraud; the insurance bonds were a fraud; the hidden commissions on everything were a fraud. No party comes out of this with any honour. But, we must also bear in mind that OMI bought £200,000,000 of this toxic, fraudulent crap and allowed it to be used as investments for retail, low-risk pension savers. Additionally, OMI accepted dealing instructions from an unregulated firm which was selling the insurance bonds illegally. But let us not forget that Generali and SEB were just as bad.

Maybe Leonteq and OMI will volunteer to settle without a bloody legal battle – from which only the blood-sucking lawyers will win. The millions that both Leonteq and OMI will be paying over the coming months and years would be better spent on paying redress to the real victims in this disgraceful debacle – the Continental Wealth Management clients who entrusted their life savings to the scammers, the life offices and the structured note providers such as Leonteq – but let’s not forget Commerzbank, Royal Bank of Canada and Nomura.

July 21, 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
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