Tag: SEB

  • 2021/22 Roundup for Pension Life

    2021/22 Roundup for Pension Life

    2021 was a tough year for everybody in the world. But for Pension Life it was especially frustrating because courts and law firms were severely held up as they got to grips with the challenges of Covid, travel restrictions and working remotely.

    Attending hearings and meetings by video conference was a hit-or-miss affair. The success of the communication depended on the reliability of the wifi, the quality of the microphone and camera, the ability of the participants to manage (often complex) IT issues.

    Zoom court meeting where an attendee couldn't turn off a cat filter

    Holding virtual meetings with lawyers working from home often became challenging when interrupted by small children or pets (or partners in the background nipping to the bathroom wearing only a towel).

    The term “beware of the dog” took on a whole new meaning – as well as extending to the cat and budgie. Conversations became disrupted by all sorts of background sounds, and it was frequently possible to miss important bits of a conversation because of noise pollution. This was made even more challenging when trying to work in Spanish and wearing a mask and glasses.

    But still the essential task of working towards pursuing those who carried out or facilitated the scams and preparing claims for victims of pension scams continued. Albeit more slowly and haltingly than normal.

    So, here is a brief round-up of the main developments for Pension Life from 2021 and the plans for 2022.

    Ark – Tax Tribunal trial for pension scam victims

    Judge Peter Kempster
    Judge Peter Kempster

    After a frustrating ten-year wait, the pre-trial conference took place with Judge Kempster and all the parties involved in the Ark Tax Tribunal trial. With desperate attempts by HMRC to put the trial off until the end of 2023, the trial date was finally – thankfully – set for December 2022.

    There are more than half a dozen different categories of appellant; member who did receive a loan; member who didn’t receive a loan; member who did make a loan; member who didn’t make a loan; member who paid their loan back; member who paid the tax on the loan…….

    Most of the appellants have dropped out of the trial for one reason or another. I think the reality of actually appearing in court and being subjected to HMRC’s barrister’s inevitably hostile cross examination may have finally sunk in for some people. We are now down to just two appellants – one represented by me and one by Rebecca Sheldon from Old Square Tax Chambers. Essentially, this will be a contest about who is going to have to pay the tax: those with a loan or those without a loan.

    The next eleven months will see an increasingly urgent series of communications between the court, the appellants and their representatives. In the background, there are now two separate All Party Parliamentary Groups trying to lobby parliament for an amnesty for victims of pension and investment fraud who are facing tax penalties.

    Also, the FCA has asked pension scam victims to submit evidence following an investigation into the activities of Premier Pension Solutions, AES Financial Services and International Pension Transfer Specialists (all involving Stephen Ward and Sam Instone).

    Capita Oak – Tax liabilities and recovery of Store First assets

    Stephen Ward of Premier Pension Solutions with his mythical employer
    Stephen Ward of Premier Pension Solutions with his mythical employer

    Capita Oak was a bogus “occupational” pension scheme set up with a mythical employer in Cyprus by Stephen Ward of Premier Pension Solutions and his pensions lawyer Alan Fowler. The scheme remains in the hands of Dalriada Trustees (appointed by the Pensions Regulator).

    With £10 million of the 300 members’ funds invested solely in Store First, and “loans” paid out by a Gibraltar company called Thurlestone, the victims remain trapped and unable to withdraw their tax-free 25% lump sums, or access a retirement income.

    Dalriada had rejected an offer to sell the store pods back to Store First several years ago. There may be another offer this year – although it is unlikely to be as high as the one Dalriada previously turned down. Sadly, whatever offer is made and accepted, a large chunk of this money would be used up in paying trustees’ and other fees (such as legal costs).

    There had been a large crew of scammers behind the Capita Oak scheme – as well as the parallel Henley and Westminster schemes. Two significant figures among those who operated and distributed these scams were Phillip Nunn and Patrick McCreesh.

    Despite the Insolvency Service carrying out a comprehensive investigation into these cases, Nunn and McCreesh were not sanctioned by either the Insolvency Service or the FCA for carrying out regulated activities illegally. Nunn & McCreesh went on, in 2014, to set up the Blackmore Group and launched the Blackmore mini bond which was promoted by Surge Group (which also promoted the London Capital & Finance mini bond which is now being wound up by Duff & Phelps).

    Nunn and McCreesh also issued the Blackmore Global investment fund which is now reported to be worthless. The destruction of the original value of the fund is believed to be due to investing in over-priced, speculative property. Any remaining value was extinguished by paying out hefty commissions to the introducers and “advisers” who promoted the fund.

    Adams v Carey

    In 2021, the Appeal Court ordered the SIPP provider Carey (now Options and owned by STM) to reinstate appellant Russell Adams’ pension. Adams had been “advised” by unlicensed scammer Terence Wright of Country Land and Property in Spain. The advice had been to transfer his pension into a Carey SIPPS and invest all of it into Store First.

    The Appeal Court decided that Carey should have rejected the advice as there had been an FCA warning about Terence Wright. However, Christine Hallett – CEO of Carey – deliberately ignored this warning and accepted Wright’s instructions to invest not just Mr. Adams’ pension in Store First, but also hundreds of others.

    At one point, Hallett finally realised that she had been wrongly accepting pension transfers from Terence Wright, refused to accept more transfers, but continued to act on Terence Wright’s investment instructions and invested £millions more in Store First.

    Lord Justice Newey, Lady Justice Rose and Lady Justice Andrews inside a Store First Store Pod

    The Appeal Court determination has set a powerful precedent for hundreds more victims to take similar action to have their original pensions reinstated. Ironically, the Store First store pods are now doing well and more storage facilities are going to be built. However, the fact remains that store pods are not suitable assets for a pension, as they are illiquid and – as Justice Andrews ruled – they are “hard to value”.

    Acquisition of Quilter by Utmost

    Monsterous wedding of Utmost & Quilter

    In 2020, RL360 acquired Friends Provident International. And late in 2021, Utmost (formerly Generali) acquired Quilter (formerly Old Mutual International). So, as hundreds of millions of pounds have changed hands across these two buyouts, deceased victims of fraud facilitated by these four death offices will inevitably turn in their graves.

    Former CEO of Quilter, Peter Kenny, has moved on to even greener pastures as he “pursues different opportunities”. Kenny, who – in 2018 – promised to pay compensation to some of the victims (two of whom have since died), will have done very nicely out of the Utmost acquisition.

    As a former regulator, Kenny should certainly have known better than to do business with the hordes of unlicensed scammers. Who knows – perhaps he will use his ill-gotten gains to set up a charity for death office victims in 2022….

    GFS – Hong Kong QROPS gone bad

    In 2022, the pension-scam focus will drift as far offshore as Hong Kong. Bogus occupational schemes had originally been the speciality of Stephen Ward (Ark, Capita Oak, Westminster, Henley, London Quantum etc). But, in 2014, a group of scammers set their sights on a bogus superannuation scheme in Hong Kong.

    In the UK, anyone with any kind of earnings can join an occupational pension scheme. A person does not need to be employed by the sponsoring employer – as determined by Justice Morgan in the Hughes v Royal London case. This does, of course, sound completely barmy and opens the doors wide for all sorts of scams and scammers.

    However, in Hong Kong, a person can only – by law – join an occupational (superannuation) pension scheme if they are genuinely employed by the sponsoring (principal) employer.

    In 2014, a group of scammers got together. This included John Ferguson, David Vilka and Charlie Goldsmith of the Square Mile group, and Phillip Nunn and Patrick McCreesh of Blackmore Group.

    David Vilka (right) & John Ferguson (left) of Square Mile making toxic investments
    David Vilka (right) & John Ferguson (left) of Square Mile

    Hundreds of mainly UK-based pension holders were conned into transferring their pensions into the GFS QROPS in Hong Kong. The money was then invested in toxic UCIS funds and unregulated mini bonds.  Of course, none of these British victims was employed by the employer.

    The investments included Blackmore Global, Christianson Property Capital, Swan, GRRE and other investment scams. In total at least £27 million was invested – some of it in insurance bonds such as Quilter, Utmost, Hansard and Friends Provident. An attempt was made to transfer some of the funds into Gravitas bonds (a death office in Mauritius), but this was thwarted in 2015 when a new trustee took over.

    In 2022, the Hong Kong version of the Pensions Regulator (the MPFA) will be deregistering the GFS scheme and a liquidator will be appointed. The liquidator will need a robust shovel to dig through all the toxic rubbish assets and recover several million pounds’ worth of stolen cash.

    The good news for some of the members, however, is that Square Mile is now in liquidation. This means that there is a valid claim on the Financial Services Compensation Scheme of up to £85,000 per victim.

    FSCS claims will be made for qualifying GFS members early in 2022 and hopefully this will result in at least some victims getting part or all of their pensions back.

    CWM Criminal Trial – awaiting court’s decision

    The trial against the members of Dénia-based Continental Wealth Management finally concluded in December 2021. The criminal proceedings had been held up for a year due to COVID. But finally, the last of the defendants testified before the judge and procurador. These included Darren Kirby and his girlfriend Jody Smart (formerly Bell, Kirby and now Pearson). While Jody did appear and testify in court, her former boyfriend Darren Kirby remains on the run.

    “Advisers” Dean Stogsdill, Neil Hathaway and Anthony Downs also appeared – along with Darren Kirby’s original partner and co-founder Paul Clarke. Clarke had left CWM early on to run AES Spain for Sam Instone – and continued to operate Darren Kirby’s business model by scamming victims into illegally-sold death bonds and structured notes. Clarke now runs a new firm called Roebuck Wealth under the German license of Trafalgar International.

    Quilter TOB

    In December, the last of the victims appeared in the Dénia court to testify. The judge has now heard 17 victims’ testimonies, and seen the documentary evidence of the investment scams operated by the various members of the CWM team – headed up by company director Jody Smart/Bell/Kirby/Pearson. One victim passed away in early 2021, so the re-starting of the criminal proceedings sadly came too late for him.

    Also in 2021, Jody denounced me for sharing a photograph of her dressed as a prostitute. I did indeed share the photo – as did hundreds of other CWM victims as it was all over social media. Everyone who saw this revolting picture felt and expressed the same disgust. It became ever more astonishing that Quilter, Utmost and SEB had been accepting investment instructions from this woman’s firm.

    The judge dismissed the accusation against me.  The photo is now irreversibly in the public domain. (It was so graphic that it can unfortunately never be “unseen” – and would put even a rhinoceros off its lunch).

    This will, hopefully, encourage death offices such as Quilter, Utmost, RL360 and Friends Provident, to be a bit more discerning in 2022 about the parties to whom they give terms of business and from whom they accept investment dealing instructions.

    Malta Arbiter Appeals – Civil Court upholds most of the Arbiter’s determinations

    Since 2017, around 70 victims of pension scams complained to the Malta Arbiter. The complaints were that QROPS trustees had accepted transfers and investment instructions from unlicensed and unqualified advisers. Many of the complainants reported that their pension funds were placed into insurance bonds and then invested in high-risk investments which were only suitable for professional investors.

    These investments – many of them toxic structured notes from providers such as Commerzbank, Leonteq, Royal Bank of Canada and Nomura – were placed on the insurance bond providers’ platforms. From here, the scammers who had terms of business with these providers could pick and choose the highest-risk investments which paid them the most commissions. These providers included Quilter (formerly Old Mutual – recently taken over by Utmost/Generali), Utmost and SEB.

    Millions of pounds’ worth of pensions were destroyed in the past decade. The Arbiter upheld most of the complaints against the QROPS trustees, but only awarded the complainants 70% of their net investment losses. This was on the basis that the defendants were only partly responsible, and that the advisers as well as the insurance bond providers were also culpable – and contributed to the losses.

    The defendants appealed against the Arbiter’s decisions. In late 2021, the first civil court decisions were issued – dismissing the defendants’ appeals. The rest of the appeal decisions are expected during 2022 and are expected to uphold the Arbiter’s decisions.

    Civil Cases against life offices in Spain

    A determination obtained from the Spanish insurance regulator confirms that virtually all insurance bonds are sold illegally by the scammers who peddle them across the Iberian peninsula and the Balearics.  This is because there are very specific regulations which must be observed when advising on any insurance products – and the scammers operating in Spain routinely ignore these.

    Spanish legal experts advise that insurance bond providers have indeed facilitated fraud, abusive practices and contravention of EU and Spanish laws and regulations.  There are therefore strong cases against the insurers which will be pursued during 2022 – with the first claims due to be issued during the first quarter of the year.

    Spanish Justice

    Obviously, the strength of the civil cases against the insurance companies will be reinforced once the criminal court issues their determination in the CWM case. 

    The civil claims will be seeking rescission – i.e. the reversing of the single-premium payments and subsequent unlawful investments in unsuitable, high-risk investments. 

    Civil Cases against life offices not in Spain

    While Spanish law is fairly unique, and does not resemble the laws of England, the Isle of Man, Ireland or Guernsey (where the majority of death offices are based), there are thousands of pension scam victims who are not based in Spain. 

    Preparations are now being made to bring civil cases against all insurance companies such as Quilter, Utmost, Friends Provident and RL360 who have facilitated fraud and mis-selling (resulting in serious loss for the victims).

    There are already several groups trying to get civil litigation against these insurers off the ground.  One is being brought by Signature Litigation against Quilter and Friends Provident – mainly for the investment losses caused by the failure of UCIS funds such as LM, Axiom and Premier New Earth.

    The other cases are being brought by Forsters LLP.  This case suffered a setback when their funder – Affiniti – went bust in November 2021 and is now being wound up by Quantuma:

    Forsters’ clients have also been told they can make claims against the QROPS providers in Malta for the losses not covered by the Malta Arbiter’s awards.

    Trafalgar Multi Asset Fund – Cayman Islands

    The victims of the STM Fidecs/Trafalgar Multi Asset Fund pension and investment scam are now mostly out of time to bring civil claims in Gibraltar.  The scammers behind the investment of the funds transferred into the STM Fidecs QROPS are now under criminal investigation by the Serious Fraud Office.  Once convicted, this should help with the criminal proceedings being launched in Gibraltar – although this does not stop the criminal proceedings from going ahead anyway.  As they are criminal, as opposed to civil, the time limits do not apply.

    Much of the Trafalgar Multi Asset Fund was invested in the Dolphin Trust investment/loan scam – later re-named as the German Property Group.  This fund was paying out huge commissions of around 19% to the scammers who introduced thousands of victims to the “loan” scheme.  There is now mounting evidence that Dolphin was nothing more than a Ponzi scheme and that many of the purported property purchases were fictional. 

    In summary, progress this last year has indeed been slow due to the pandemic. However the legal teams and professional advisors have never slowed down in their efforts to bring redress and justice to the victims.

  • CRIMINAL CASE AGAINST UNLICENSED FINANCIAL ADVISERS

    CRIMINAL CASE AGAINST UNLICENSED FINANCIAL ADVISERS

    Denia Courthouse
    Denia Courthouse

    CRIMINAL CASE AGAINST UNLICENSED FINANCIAL ADVISERS:

    Last month saw the first of the CWM pension scam victims testifying in the criminal court of Denia, Alicante.  Nine brave people re-lived their ordeal in front of the judge.  They answered the judge’s questions, and were then cross-examined by the defendants’ lawyers.

    Darren Kirby in front of CWM office
    Darren Kirby in front of CWM office

    The complainants who testified were all clients of Continental Wealth Management (CWM) run by Darren Kirby and Jody Smart (pictured below), as well as Premier Pension Solutions (PPS) run by Stephen Ward.  PPS was an “agent” and “partner” of AES Financial Services run by Sam Instone. (PPS and AES are now under investigation for their role in the 2011 Ark Pension Liberation scam).

    It is hard enough for a pension scam victim to be reminded of their ordeal at the hands of callous, greedy scammers.  But to have to recount in graphic detail the methods used by the scammers was hard for them to bear.

    The scammer’s typical arsenal of weapons comprises a series of lies – adeptly used to trick the unwary into handing over their pensions and life savings.  The victims who testified in Denia know these lies all too well.  And now, so too does the judge:

    Cyrus regulator logo

    LIE NO. 1: “We’re fully regulated”.  This, of course, was completely untrue.  CWM operated, purportedly, as a member of the Inter Alliance “network”.  And Inter Alliance was not only unregulated but had been fined by the Cyprus regulator for providing regulated services without legal authorisation.

    Jody Bell of CWM
    Jody Smart of CWM

    LIE NO. 2: “Yes, I’m fully qualified”.  This, again, was untrue.  Few – if any – of the people working for CWM had any financial qualifications.  They were mostly poorly-educated salesmen with the gift of the gab.  They had learned a well-used and very clever script which was designed to mislead and defraud their victims.

    Toxcic insurance bond providers; Quilter, Utmost & SEB

    LIE NO. 3: “The case for transferring your pension into a QROPS is overwhelming”.  In the case of final salary pensions, this was never true.  A guaranteed income for life from a company pension final salary scheme can almost never be bettered.  Most personal pensions should also have been left where they were.  In fact, all pensions would have been better off avoiding ending up in the hands of CWM – even if a QROPS had been the right option.

    LIE NO. 4: “Your pension needs to be in an insurance bond (Quilter, SEB or Utmost).  This is for protection and tax efficiency”.  This was never true. The bond provided no protection, no tax savings, no flexibility.  The 7% commission paid to the “adviser” was not disclosed. 

    LIE NO. 5: “Your money will be invested in blue chip companies and you will get high returns and low risk.”  High returns come with high risk – and the high commissions (paid to the scammers) were hidden from the victims.  Toxic structured notes were used for all the victims – and these are complex investment products which were only suitable for professional investors. 

    There were, of course, many other lies – including the fact that when the toxic structured notes and unregulated funds failed, these were “only paper losses”.  Plus the fact that the investors’ signatures were forged or copied on the investment dealing instructions.

    Structured Note Providers

    The second half of the complainants will be heard by the court on 9th and 10th December 2021.  Once the court has heard from all these victims (minus Bob Bowden who sadly passed away recently), the fate of the defendants will be decided by the judge.  Let us all hope this will herald an end to these types of pension and investment scams. 

    Perhaps “the end” will be just the beginning.  A new dawn for an offshore financial services industry which sells proper financial advice – and not just commission-laden products.

    CRIMINAL CASE AGAINST UNLICENSED FINANCIAL ADVISERS

  • Armed Against Pension Scams in Spain

    Armed Against Pension Scams in Spain

    Knowledge is power in the fight against pension scams in Spain and all British expat jurisdictions. Be warned! Be armed!

    In the past decade, millions of pounds of pensions and life savings have been destroyed in Spain. Much of this has involved insurance bonds (OMI, SEB and Generali) – as well as all other popular expat countries. Only by benefitting from lessons learned so painfully by those who’ve already been scammed, can new potential victims arm themselves against the scammers.

    Pension scams always start with a so-called “financial adviser” or “wealth manager” or “retirement consultant”. Sadly, it is almost always British “advisers” which scam British expats.

    Potential victims need to understand what to look out for – and avoid. Here are the essential “must haves” for proper, professional financial advisers (in other words people who sell advice, not products):

    • LICENCE – The firm must be licensed – both for insurance and for investment.
    • QUALIFICATIONS – The adviser must be qualified – and a link to proof of the qualification clearly visible on the firm’s website.
    • LEGACY – There must be no legacy of previous scamming within the firm.
    • INSURANCE – There must be a professional indemnity insurance policy in place.
    • NETWORK – If the firm is an agent of a network, there must be an up to date copy of the agency agreement freely available.
    • INSURANCE BONDS – The firm must not sell insurance bonds illegally.
    • UNREGULATED FUNDS AND STRUCTURED NOTES – The firm must not invest clients’ funds in unregulated or esoteric funds, or structured notes.
    • COMPLIANCE – There must be a proper compliance function in place.
    • MANAGEMENT AND TEAM – All members of the team must be clearly visible on the website – along with details of who is in charge and responsible for the firm’s activities and compliance.
    • COMMISSION POLICY – The firm’s policy on undisclosed commissions must be clearly visible.

    When I Googled the term: “Financial Adviser Spain” just now, the top results that came up for me were:

    Blacktower Wealth Management

    Blevins Franks

    Finance Spain – Patrick Macdonald

    Spectrum IFA

    Chorus Financial

    Abbey Wealth

    Alexander Peter

    Axis Consultants

    Logic Financial Consultants

    Harrison Brook

    Seagate Wealth

    When I changed the search term to: “Pension Advisor Spain” or “Wealth Advisor Spain” I also got the following:

    • deVere Spain
    • Mathstone Financial Management
    • Pennick Blackwell
    • SJB Global
    • United Advisers Group
    • Indalo Partners
    • Trafalgar-International
    • Fiduciary Wealth Management

    And one firm which won’t come up at all, no matter how hard you search, is:

    • Roebuck Wealth – run by Paul Clarke

    Plus one which only comes up if you know what to search for:

    • Callaghan Financial Services

    And, of course, the two which have closed down:

    • Continental Wealth Trust – aka Continental Wealth Management
    • Premier Pension Solutions

    So let’s take a look at some of these firms to see what we can learn from their websites and see if there are any warning signs for potential victims:

    Blacktower Wealth Management – Always look at the bottom of a firm’s website to read the small print and see how the firm is licensed. Blacktower is licensed by the Gibraltar Financial services Commission for both insurance mediation and investment advice. Why Gibraltar? Why not Spain? Gibraltar has a long history of facilitating and licensing scams and scammers and the Commission even employs one itself. The website claims to have “Consultants throughout our offices in Europe” – and this worries me. What is a “consultant”? Why not talk about advice, not consultancy?

    Looking at the directors and “international financial advisers” of the firm, there are quite a few. Associate Director Tim Govaerts claims to be qualified with the Chartered Institute of Insurers up to Level 3. But the CII register says they’ve never heard of him. Richard Mills claims to be qualified with both the CII and the CISI, but both registers say they’ve never heard of him. Quentin Sellar claims to be qualified with both the CII and the CISI, but only the latter has heard of him. Clifford Knezovich also claims to be qualified with the CISI but does not appear on the register. Lucia Melgarejo is another member of the team who also claims to be qualified. I met her a few years ago, when a colleague of hers had cold called me, and she told me that she was too busy selling to get qualified.

    The member of the Blacktower team which worries me the most is Terry Tunmore – as he was one of the scammers at Stephen Ward’s Premier Pension Solutions. Tunmore certainly soils the reputation of this firm, and should not be employed by any firm holding itself out to be professional and to have integrity.

    Under the Licensing section of the website, the firm is immediately getting potential clients warmed up to insurance bonds and “wrappers” – and states that it has permission to recommend them and provide investment advice on the underlying portfolios. This should worry any potential client – and ring loud alarm bells – as this indicates a clear intention to use bond providers such as Quilter, SEB, Generali or RL360 – and earn hidden commissions. These products are deemed to be invalid under Spanish law, and are routinely sold illegally in Spain.

    Blacktower’s website makes no mention (that I can find) of compliance or their professional indemnity insurance policy. It also worries me that Blacktower has so many “agents” – and without hard evidence of a robust compliance function, I think there is a risk that some of these agents could well be acting as unsupervised “feral” salesmen, rather than bona fide financial advisers.

    Blevins Franks – Well-known firm with offices in Spain, and other European countries. The team in Spain all have titles such as Partner, Private Client Manager or Regional Manager – and there is no mention of any of them being genuine financial advisers. In Spain, Partners Christopher McCann, Brett Hanson, Paul Montague, Andrew Southgate, Henry Rutherford and David Bowern all claim to be qualified with the London Institute of Banking & Finance, but none of them appears on the member register. Steven Langford claims to be CII qualified but does not appear on the register. With so many members of the team claiming – falsely – to be qualified, this should ring loud alarm bells with any potential victims. We know that Blevins Franks routinely puts all clients into a Lombard insurance bond – which means they are committing a criminal offence in Spain.

    Insurance bonds are illegal and invalid for the purpose of holding investments in Spain, and the usual manner of selling them is also a criminal offence. An insurance bond provides no benefits or protection for investors – and should never ever be used inside a pension (QROPS). Blevins Franks also has a close tie with Russell funds – and routinely invests their clients’ funds in Russell. There’s nothing bad about Russell – but there’s nothing good about them either. A portfolio should always be a well-spread mixture of funds from the whole market – not a narrow selection of investments from one provider. I can’t see any information on the Blevins Franks website about their professional indemnity insurance, compliance or commission policy. All in all, I think there are too many risks with this firm and it should be avoided.

    Finance Spain – Patrick Macdonald – This firm comes high up the Google rankings, so obviously spends a lot of money on SEO and/or Google Ads. The “Regulation” bit on the website states the firm is “part of a group who are regulated by the Financial Services Commission in Gibraltar”. But which “group” is it talking about? There’s a link to the GFSC website, but no evidence as to how the firm is licensed. The website also claims to consist of “qualified and regulated international wealth managers and members of the Chartered Institute for securities and Investment (CISI) in the UK”. But who are these so-called wealth managers? The only one named on the website is Patrick Macdonald – and the CISI register shows him as being employed by Blacktower. But the firm Finance Spain does not appear on the GFSC register as being one of Blacktower’s agents – so how is this firm licensed?

    What worries me most about this website is that it is openly flogging insurance bonds. It promotes “Spanish Portfolio Bonds” – which are routinely sold illegally by the scammers. It claims these bonds are a “tax beneficial home for investments”. But that isn’t true in Spain, as the so-called tax benefits only work for UK residents. In the “Wealth” section of the website, you are met with a brazen offer of insurance bonds from Prudential, Old Mutual and SEB. The section on pension transfers is also very worrying as it gives misleading comparisons between UK pension providers and EU-based QROPS providers; it fails to provide warnings against transferring final salary pensions and – worst of all – states “There is greater investment choice”. This so-called choice is what so many scammers in Spain (in the past ten years) have used to destroy victims’ pensions with high-risk, high-commission, unregulated investments such as structured notes.

    Ironically, the Finance Spain website has a section called “Top 5 Warnings” about pension scams. It recognises that the industry is rife with scammers and warns about cold calling, cashing in pensions, pension reviews and the promise of high returns. But it ignores the fact that Finance Spain is itself heavily promoting insurance bonds – which have been the biggest single cause of pension scams in Spain in the past decade. With no clear information about licensing, compliance, insurance or commission policy – and no idea who the firm is or by whom it is managed – I think it is safe to say this is one to avoid.

    Spectrum IFA – Oh dear, where to begin! There are so many alarm bells here, it’s like being inside a busy fire station. No investment license, but openly giving investment advice, and flogging insurance bonds: “efficient investing (using Insurance wrappers”. And that’s just the home page. The website openly boasts: “Our internationally qualified, professional advisers make certain you receive the best possible advice for the following areas:  Investment Advice in Spain – Pension planning in Spain. That’s a bold claim to make for a firm with no investment license.

    The website goes on to boast: “All our advisers live in Spain, are experienced and qualified.” But who are they? What are their qualifications? One “financial adviser” is Dennis Radford who claims to be qualified with the CISI – but does not appear on the register. Aside from lying about his qualifications, he is one of the former Continental Wealth Management scammers responsible for defrauding many victims out of their pensions and life savings. I have brought this to Spectrum’s attention before, but they obviously don’t care – as Radford brings in a lot of business and commission (on illegally-sold insurance bonds and high-risk, inappropriate investments).

    There is one adviser who is qualified with the CII – John Hayward. I believe he is a decent bloke – so what on earth he is doing with Spectrum is beyond me. Spain may be full of inadequately licensed firms which do nothing but flog insurance bonds to victims who don’t need them and can’t afford them, but there are some (admittedly not many) decent firms he could join.

    Abbey Wealth – This firm has been around a long time – flogging insurance bonds to unsuspecting victims. The firm was an agent of well-known scammers Inter Alliance – the “network” of which Continental Wealth Management was also a member. Abbey Wealth is now licensed by the Central Bank of Ireland. If you’ve ever wondered why so many firms like Ireland, it’s because regulation there is as flaccid as a marshmallow. Another reason why Quilter International is so active there with its insurance bonds – so beloved of so many pension scammers. Abbey boasts a flock of “advisers” who claim to be passionate about financial services – including Ben Noifield who states he is CII qualified (the CII register says otherwise). The rest of the sorry team are an assortment of unqualified salesmen masquerading as advisers.

    No mention of professional indemnity insurance, and no reference to their murky past as part of the Inter Alliance shambles.

    Alexander Peter – No information about if or how the firm is licensed; who the advisers are and whether they are qualified; who is in charge, what professional indemnity insurance they hold.

    Harrison Brook – This firm claims to be a member of the Nexus Global network. But there is no access to the agency agreement and no link to any professional indemnity insurance details or information about who is in charge and who the “advisers” are (and whether any of them are qualified). The question also has to be asked: why don’t firms get their own license rather than joining a network? Ding dong!

    Seagate Wealth – No information about how (or if) this firm is licensed. It states on the website: “We work in conjunction with fully regulated and authorised companies”. So presumably that’s an admittance that they are not regulated or authorised. There’s no information about who controls and is responsible for the firm, and nothing to state how any of the team members are qualified. Perhaps one of the biggest alarm bells about this lot is that they are mostly ex AES International and stole the Spanish client book back in 2015.

  • Spanish litigation: Quilter Ireland, SEB and Generali

    Spanish litigation: Quilter Ireland, SEB and Generali

    Life offices who caused the death of victims and their life savings/pensions, will now face proceedings in the Spanish civil courts. Pension Life’s proceedings against the defendants are due to be launched before Christmas 2020. The defendants will be Quilter International (Ireland), SEB and Generali (which has changed its name to Utmost Wealth).

    In the past ten years or so, the life offices – Quilter, SEB and Generali (shamefully promoted by International Adviser) – have freely given terms of business to unlicensed, unqualified, unscupulous “chiringuitos financieros”. These scammers – some with no license at all, and some with only a restricted insurance license – have put thousands of victims into pointless, expensive insurance bonds. The scammers’ sole motivation for the use of these insurance products is the commission paid by the providers: somewhere between 5% and 8% (depending on the term of the bond).

    A bond is merely a “wrapper” (or container) and serves no purpose – other than a purported possible tax “efficiency” loophole. However, the so-called tax advantages are dubious at best outside the UK – and non-existent within a pension. In reality, any tax saved would be far outweighed by the high cost of the insurance bond.

    The real problem with these insurance bonds has been the high-risk investments offered by the bond providers on their “platforms”. Many of the investments are highly toxic, only suitable for professional or sophisticated (or reckless) investors, and are chosen purely for the commissions they pay to the scammers.

    Chiringuitos – such as the notorious Spanish firm Continental Wealth Management (which collapsed in 2017) – love insurance bonds; esoteric, unregulated investment funds; and structured notes. This passion comes not from any benefit provided to the victims, but from the huge commissions they (the scammers) can earn if their high-pressure sales techniques are effective.

    One group of scammers – including Stephen Ward of Premier Pension Solutions, Paul Clarke of AES International (now Roebuck Wealth), Darren Kirby and Jody Bell/Smart/Kirby/Pearson of Continental Wealth Management – is currently facing fraud charges in the Denia criminal court.

    The fraud behind the insurance bond scams is, of course, facilitated and encouraged by the insurance companies themselves. One group of victims – who have lost hundreds of millions in risky, unsuitable investments such as LM, Axiom and Premier New Earth – has already issued proceedings in the Isle of Man civil court. Pension Life is preparing to issue another for the losses caused by other toxic funds and structured notes – also in the Isle of Man civil court.

    Many of the culpable life offices base themselves on the tiny, dreary Isle of Man. It is a well-known tax haven for companies and individuals who are not prepared to pay their fair share of tax – and it also routinely harbours scams and scammers (due to limp regulation and ineffective governance). The failures of the IoM’s legal system – as part neither of the UK nor Europe – are well known and heavily exploited by institutions with nefarious intentions. Known, serial scammers such as Phillip Nunn and Patrick McCreesh of Blackmore Group based their Blackmore Bond (promoted by Surge Group – which also promoted the collapsed London Capital & Finance “mini bond”) and their Blackmore Global fund there.

    And – of course – Quilter, Friends Provident International and RL360 are all based on the Isle of Man (referred to by many as the “Isle of Scam”).

    In Spain, virtually every insurance bond ever provided has been sold to the victims illegally (in contravention of the Spanish insurance regulations). Few victims are ever made aware of the serious drawbacks of these products:

    • inflexibility of the fixed terms of up to ten years
    • annual fees are based on the original premium (amount invested) – which means that when investment losses occur, the fees have an ever-increasing damaging effect on the remaining funds
    • bond providers will accept investment instructions from unqualified, unlicensed, known scammers
    • obviously low-risk, retail investors (such as those in a pension) will be invested in high-risk funds
    • when losses start to appear, the bond providers do nothing to challenge the reckless, irresponsible conduct of the scammers with whom they have terms of business
    • some victims, whose entire portfolio has been wiped out by the investment fraud facilitated by the bond providers, continue to be charged annual bond fees
    • victims’ signatures on investment dealing instructions are frequently forged or copied

    The Isle of Scam courts will be watched with intense interest by thousands of Quilter, FPI and RL360 victims (whose life savings have been wiped out) over the coming year. But, meanwhile, the Spanish courts will get to hear the cases against providers based in Ireland. All victims of Continental Wealth Management have been asked to obtain their documents for the litigation from Trafalgar International. Any who have not received an email from Pension Life can contact Trafalgar’s Tony Barnett direct on:

    information@trafalgar-gmbh.com

     

    The letter of authority which needs to be sent to Mr. Barnett in order to participate in the Spanish civil proceedings against Quilter International, SEB and Generali (Utmost Wealth) is as follows (victims can copy and paste this text into a document if necessary):

    URGENT Letter of authority to Antony Barnett of Trafalgar International GmbH

    Mainzer Landstrasse 49, 60329 Frankfurt am Main Germany

    Dear Mr. Barnett

    Letter of Authority to provide documents relating to pension, insurance bond and investments/losses

    Please accept this as my letter of authority for you to discuss, communicate and deal with Angela Brooks of Pension Life who is acting as my Representative on the subject of my affairs in respect of my pension,  investments and losses arising as a result of Continental Wealth Management S.L./Continental Wealth Trust S.L.

    Name: …………………………………………………………………………Signature: …………………………………………………………

    Address: ……………………………………………………………………………………………………………………………………………….

    ……………………………………………………………………………………Passport Number: ……………………………………………..

    Please provide the below copy documentation/information to Angela Brooks by return.  These documents are required immediately for litigation in the Spanish Civil Court due to be issued next month.  I intend to be a claimant in these proceedings against the life offices Quilter International Ireland, SEB and Generali (Utmost).

    1. Pension transfer advice (Premier Pension Solutions or Global Financial Options)
    2. Client contract, agreement and confirmation with CWM and Inter Alliance (For when CWM was with Inter Alliance)
    3. Client contract, agreement and confirmation with CWM and Trafalgar (For when CWM was with Trafalgar International)
    4. Fact find and risk profile
    5. Insurance bond fees schedule
    6. Insurance bond advisor transfer letter (from Inter Alliance to Trafalgar)
    7. Insurance bond application
    8. Insurance policy document
    9. Latest valuation statement
    10. Latest full transaction history from inception to date (or point of redemption)
    11. Latest estimated bond surrender value
    12. Copies of all investment dealing instructions since inception
    13. Closing insurance bond statement (where bond has been surrendered)
    14. Closing pension statement showing all charges and amount remitted (where pension has been redeemed)
    15. Confirmation and full details as to how CWM’s insurance mediation/investment advice was licensed
    16. Details of all fees and commissions charged by CWM, Inter Alliance, Globalnet and Trafalgar
    17. Any correspondence relating to queries or complaints
    18. Trafalgar’s professional indemnity insurance policy and schedule
    19. In the case of a Quilter bond, confirmation as to whether it is Isle of Man or Ireland

  • CWM Criminal Trial 24th February 2020

    CWM Criminal Trial 24th February 2020

    The protagonists behind collapsed Spanish advisory firm CWM – Continental Wealth Management – will be on trial week commencing 24th February in the Denia Criminal Court of First Instruction.

    Scammers at CWM destroyed 1,000 victims' life savings totaling £100 million. CWM was shut down in 2017 when the scale of their crimes became too embarrassing for OMI, SEB and Generali to tolerate any longer.

    This criminal matter will have enormous ramifications for similarly-affected victims, and for any advisory firms which have engaged in any of the same practices used by CWM. These illegal practices include the gratuitous selling of insurance bonds from bond providers such as OMI, SEB, RL360, Friends Provident and Generali; putting low-risk investors into commission-laden, high-risk investments; churning and concealment of backhanders; forged or copied client signatures on investment dealing instructions.

    The routine “sale” of insurance bonds (whether the clients need them or not – which 99% of the time they don’t) is illegal in Spain.  Undoubtedly this will be similar or identical in other jurisdictions.  The Spanish Supreme Court has ruled that insurance bonds are invalid for the purpose of holding investments. But still the scammers continue to flog them indiscriminately – purely for the fat commissions.

    Insurance bond salesmanship has become one of the biggest, most widespread and toxic crimes across all expat territories – and now it must be outlawed by the ethical sector of the financial services market. And there is an ethical sector which abhors the toxic and dishonest practices which will be the subject of the CWM trial. There is also a “semi-ethical” sector which is genuinely ashamed that it too has carried out such practices, but which is determined to clean up it’s act and “go straight” from now on.

    Make no mistake – the Denia Criminal Court is determined to clean up this stretch of the Costa Blanca in particular and Spain in general – as well as make an example out of the CWM scammers.  Some of the CWM victims, as well as Ark and Capita Oak victims – and those financially ruined by both Stephen Ward and Paul Clarke – will be at the court hearings the week of 24th February. There will be local and international press coverage to highlight the importance of this significant event.

    The defendants in the CWM case were served in early January.  They are now compelled to come to court to be cross-examined by our lawyer.  Each defendant will have his or her own legal representative and also a court-appointed translator.  The cross examinations will take place privately in front of the judge, but a transcript of each one will be published subsequently. I will translate these transcripts and make them publicly available on the Pension Life website as soon as they are made available by the court.

    The dates of the now compulsory court hearings are:

    • Monday 24th February from 10 a.m.: Darren Kirby; Patrick Kirby and Anthony Downs
    • Tuesday 25th February from 10 a.m.: Jody Smart, Neil Hathaway and Dean Stogsdill
    • Friday 28th February from 10 a.m.: Stephen Ward and Paul Clarke

    Darren Kirby did not show up for the last criminal trial – when he was accused of defrauding three victims out of their life savings in order to give him money to prop up the rapidly failing CWM and to pay money to his partner – Jody Smart – to invest in her fashion business: Jody Bell. One of the complainants in this previous case has since died.

    Stephen Ward of Premier Pension Solutions has fled to Florida where he owns a portfolio of at least ten mortgage-free properties near Disneyland. However, he will not succeed in avoiding prosecution.

    Sole director and shareholder of CWM, Jody Smart did turn up for the last criminal trial, so it is expected that she will probably attend this one. Smart will be keen to deflect blame from herself and claim that she was only a “nominee” director. However, in the last two years of operation, she paid herself 991,035.86 Eur (on top of her already more than generous director’s salary) – 670,035 Eur into her property company Mercurio Conpro and 321,000 Eur into her Jody Bell fashion business.

    The remaining CWM defendants: Anthony Downs, Neil Hathaway, Dean Stogsdill and Paul Clarke are likely to turn up since they are all based in Spain and have families, property and businesses here.

    CWM earned 3,391,876 Eur in commissions on sales of insurance bonds and structured notes in the last two years of operation. Scammers like CWM generally made at least 16% commission out of victims’ pensions and investments. This would mean that in this period, CWM scammed victims out of approximately 17,000,000 Eur. On top of his, the firm earned many hundreds of thousands from victims they cleaned out promising them shares in the company (which Darren Kirby had claimed was worth 10 million), properties and cars. But when the firm closed, the CWM bank account was virtually empty. This video will illustrate some of the appalling misery the CWM victims endured – and the extent to which Jody Smart benefited from the money stolen from the victims: https://www.youtube.com/watch?v=lYlxu8YOaAM&t=3s

    The following related entities have been asked to provide documentary evidence to support the complainants cases:

    Inter Alliance, Globalnet, Trafalgar, Old Mutual International, SEB and Generali

    This evidence will include copies of risk profiles and investment dealing instructions – bearing the forged investor signatures.   

    This criminal case has been brought by using 17 “lead” cases – victims of the CWM scam who have all lost considerable amounts of their life savings. These victims are now the lead complainants who also represent the interests of the further hundreds of victims who have suffered similar fates. The lead complainants have put an enormous amount of time, work and self-sacrifice towards this matter. Each complainant has had to re-live the horror of their suffering at the hands of CWM – telling their painful stories to our lawyer Antonio Bertomeu. Most of the lead complainants are based in the vicinity of Denia – where CWM committed the majority of the crimes. However, one complainant came all the way from Portugal.

    I will be with Antonio Bertomeu the week before the trial as we prepare for the cross examination of the defendants in court during the week of 24th February.  This is a crucial point in the proceedings as there has been a substantial amount of further evidence which has emerged since this complaint was originally filed in court in June 2019.  There are also further defendants who will now need to be included in the proceedings.

    The Denia court has stressed that this is an issue which is of great importance as it involves three serious criminal offences which are likely to involve substantial financial penalties and custodial sentences:

    • Falsification of commercial documents
    • Disloyal administration
    • Continuous fraud

    The outcome of this case will inevitably have far-reaching consequences for the industry globally – especially since the practices which are the subject of these criminal proceedings have been widely practised for a number of years. These crimes have not been exclusive to Continental Wealth Management and their associates.  There are many victims beyond the clients of CWM who have suffered similar crippling investment losses. The scope of these criminal proceedings will now inevitably reach into other firms and jurisdictions.

  • Alliance Partnership – ‘ere we go again!

    Alliance Partnership – ‘ere we go again!

    Alliance Partnership – ‘ere we go again! Just how many warning signs do you need?

    How many warnings do you really need?

    Alliance Partnership – ‘ere we go again! After the Continental Wealth Management debacle – a fraud facilitated by the usual suspects: Old Mutual International, Generali and SEB – the public must be warned about similar firms which are likely to scam unsuspecting victims.

    In the case of Alliance Partnership Limited – a firm registered in Nevis (where so many scams and scammers are registered because of the secrecy afforded them), there is just about every single warning sign possible. The public must be aware of the dangers posed by this firm.

    With an office in the Czech Republic, this firm has been selling insurance products and investing victims’ funds into unregulated collectives – such as LM – illegally.

    Look at the Alliance Partnership Limited website and you will find all the warning signs are clearly there in black, white, green and red:

    The exact same three death offices as used by Continental Wealth Management to destroy up to £50,000,000

    You simply couldn’t make it up: Alliance Partnership Limited is proudly displaying the three worst insurance companies: Generali, Old Mutual International and SEB, which facilitated the £100 million Continental Wealth Management scam between 2008 and 2017.

    Generali, Old Mutual International and SEB accepted investment instructions from this unregulated firm of scammers into high-risk, toxic structured notes and risky, illiquid UCIS funds. Long after the losses became evident, as low-risk investors were placed into these entirely inappropriate high-risk investments – only suitable for professional or sophisticated investors – Generali, Old Mutual International and SEB carried on accepting identical investment dealing instructions from the scammers at Continental Wealth Management.

    Alliance Partnership Limited has an insurance license in the Czech Republic and boasts that it can “help all of our clients and their unique needs related to the life journey of their financial aspirations”. They claim to be “financial planners” and that “no future is too big or too small for us”. 

    Alliance Partnership – ‘ere we go again! Yet another firm with an insurance license flogging expensive insurance bonds that nobody needs. If an investor wants to be stuck in a toxic, unnecessary insurance bond – provided by Old Mutual International, Generali, Hansard Global or SEB – which will cost a huge amount in fees and will offer high-risk, unregulated investments – then this is indeed the solution!

    But sensible investors, who don’t want to lose their life savings, should steer well clear. Alliance Partnership claims they are “here to help”. They are using unethical, unscrupulous insurance companies which will take business from any old unregulated scammers. Old Mutual International, Generali, Hansard and SEB deliberately ruin their clients’ funds with high-risk toxic funds, so the public needs to be warned about this firm.

    The only reason firms such as Alliance Partnership use these death offices, is because insurance bonds pay 8% commission. And we know there is a history of using rogue funds such as LM. So steer well clear! Others have been ruined so it is important to learn from them.

    How many more alarm bells do you want?

    How many alarm bells would you like? If the above warnings aren’t enough, here are some more – all there in black and white on the Alliance Partnership website: http://www.alliancesro.com/about.html

    • Alliance Partnership claims to offer savings plans. As it is openly promoting the likes of Generali and RL360, these are bound to be the same savings plans as used to scam thousands of victims into these toxic, expensive, inflexible plans.
    • Alliance Partnership is promoting “alternative investments”. We know that it was selling the LM fund to its victims, and this should ring loud alarm bells – because most of these so-called alternatives only serve to pay the introducer large commissions. Funds such as LM have ruined thousands of investors who have lost all their life savings thanks to unscrupulous brokers and introducers posing as “advisers”.
    • Alliance Partnership claims to offer portfolio and wealth management. The firm does not have an investment license – so it can’t legally give investment advice.
    • Alliance Partnership says it can provide pension planning services – but with just an insurance license, this is illegal.
    • Alliance Partnership is promoting the Canaccord Genuity fund – a fund which is under investigation by the FCA for non-disclosure of fees.
    • Alliance Partnership is featuring not just rogue insurance companies such as OMI, SEB and Generali on its website, but also RL360, Zurich Hansard and FPI. It is disappointing to see Investors Trust advertised on the website: this is the only life office which has ever done anything decent for investment scam victims.
    • Alliance Partnership claims to have a “team of financial planners”, and yet there is no “meet the team” section on the website. This means potential victims have no idea who the team are and can’t check up on their qualifications.
    • Alliance Partnership is promoting Azure Pensions – a QROPS run by Integrated Capabilities. This was a firm which facilitated the Blackmore Global investment scam and should be given a wide berth. https://pension-life.com/azure-pensions-a-reputation-built-on-lack-of-trust/

    Don’t take my word for it. Read the Alliance Partnership website. All the alarm bells are clearly there. Learn from past victims’ mistakes – don’t be next!

  • Continental Wealth Management – “Plunder in paradise”

    Continental Wealth Management – “Plunder in paradise”

    Victims of the Continental Wealth Management scam met Mail on Sunday's Laura Shannon in Denia in July 2019
    Victims of the Continental Wealth Management scam met Mail on Sunday’s Laura Shannon

    Mail on Sunday’s Laura Shannon met a group of victims of the Continental Wealth Management scam in Denia in July 2019.

    Here is a link to her excellent article Continental Wealth Management – “Plunder in paradise”: MAIL ON SUNDAY ARTICLE

    All power to her, this young lady put all other would-be investigative journalists to shame. Laura jumped on a plane on 24th July 2019 when she and her editor heard about the Continental Wealth Management scandal. After a long, hot bus journey from Alicante airport, she got straight down to business. She spent all afternoon interviewing a large group of distressed investors. She then attended the memorial service for one victim who had been killed by the stress he suffered when he lost his pension – thanks to Continental Wealth Management’s Darren Kirby.

    Laura Shannon – putting all other “investigative” journalists to shame

    No other British journalist has bothered to do this. No other national newspaper has taken such an interest in this important story – about how British people have been scammed by British advisers in Europe’s leading expat destination.

    Clearly shaken by the extent of the Continental Wealth Management scam, and the plight of the victims, Laura was deeply moved by the memorial service for victim Mark Davison who had died two weeks earlier. After a very long and tiring day, Laura retired to her hotel to write up her notes – ahead of another full day of meeting more victims.

    So where had all the other so-called newspapers been all this time? Where were The Sun, The Times, The Telegraph, The Mirror, The Guardian, The Express? Too lazy – and clearly not concerned with this very British problem. These newspapers do indeed have some very fine journalists – but this widespread financial crime was too low on their priority list.

    The financial press – such as International Adviser – is too conflicted with its promotion of the very company behind this scam: Old Mutual International.

    On the second day of her visit, Laura Shannon met another group of Continental Wealth’s victims and also spoke to a couple in France by Skype. Her final interview with an elderly lady (who had tried to commit suicide when she lost most of her life savings to the Continental Wealth Management scammers) left her in tears.

    At lunch time, Laura headed back to Alicante airport. Four and a half months pregnant, this energetic and passionate young woman returned to her office in Birmingham to write and file her story. She left little out and covered most of the basic points. Her article left the reader in no doubt: financial crime has flourished in Spain for years.

    There are both criminal and civil actions ongoing now – on the Costa Blanca and the Costa del Sol. The days of unqualified “chiringuitos” and unlicensed firms are hopefully over. While Britain’s feeble excuse for a regulator – the FCA run by lazy loser Andrew Bailey – fails to take any meaningful action, the Spanish regulator has at least ruled that failing to comply with Spanish regulations is a criminal offence.

    The Malta regulator has tightened up rules to help stop firms operating similar scams from abusing QROPS, and deploying inappropriate investment policies. Multiple class actions in various jurisdictions are taking legal action against rogue insurance companies – such as Old Mutual International – who have encouraged and profited from widespread financial crime.

    Ward’s luxury development at 64 Calle Haya, Moraira, Alicante

    And this is the problem: crime pays. Stephen Ward of Premier Pension Solutions in Moraira is now adding to his ten mortgage-free luxury villa property portfolio in Florida by building a huge luxury villa next to his former office in Calle Haya in Moraira.

    Paul Clarke – Darren Kirby’s former business partner (when Continental Wealth Management was first set up) has for years been seen zooming around the Costa Blanca in his Aston Martin. And Jody Smart (or Bell or Kirby) – Darren Kirby’s former girlfriend has boasted of the £13 million she earned as director of Continental Wealth Management.

    Sipping champagne while publicising her fashion empire on Youtube

    Jody now runs a swish ocean-front restaurant in Calpe with fiance Franco Pearson – seemingly untroubled by the appalling trail of devastation left behind her in the wake of the Continental Wealth Management tragedy.

    But the millions made by the scammers at Continental Wealth Management pale into insignificance when compared to the fortunes made by life offices Old Mutual International, SEB and Generali.

    Not a hint of regret for OMI’s actions – or shame at his broken promises.

    Peter Kenny did promise to pay compensation to OMI’s victims. But this was just a ruse to get me to take down my blogs about OMI so that the IPO would earn him and his accomplices more £ millions.

    The Spanish regulator has made it clear it is a criminal offence to sell insurance “bonds”.

    No firm with a conscience or any professional ethics should ever use OMI, SEB or Generali. Anyone caught mis-selling such insurance bonds in Spain is committing a criminal offence and can face jail. As most advisory firms in Spain are still doing so vigorously and unashamedly (with the same old lame excuse that such bonds are “tax efficient”), the Spanish jails are likely to get pretty crowded in the not-too-distant future.

    Spain is highly motivated to protect British expats who retire on Spanish soil – and is now learning how deeply dishonest and disloyal British “chiringuitos financieros” (the Spanish regulator’s term for financial scammers) are.

    But how do people avoid getting scammed from now on?

    Part of the problem is knowing what questions to ask – and then being able to understand the answers. Unfortunately, Stephen Ward was the exception to the rule – since he was highly qualified and his firm – Premier Pension Solutions – was authorised to provide investment advice.

    1. Check that the firm is authorised (regulated; licensed). If investment advice is given, make sure the firm has an investment license: don’t be fooled into believing that an insurance license is enough. It isn’t.
    2. Check that the adviser is qualified to give financial advice. He or she must provide evidence of any qualifications claimed. If the relevant institute does not show the qualification, then the adviser is not qualified – no matter what exams may have been passed previously.
    3. Don’t get talked into an insurance bond (aka “life bond” or portfolio bond). They are expensive and unnecessary – and only serve to pay the adviser a fat commission.
    4. Don’t let an adviser invest your funds into expensive, risky assets which are only there to pay fat, undisclosed commissions FROM YOUR MONEY.

    Lastly, make sure you get everything – all costs, fees, charges and commissions – in writing. DON’T GET SCAMMED LIKE THE CONTINENTAL WEALTH MANAGEMENT VICTIMS. They will all give you exactly the same advice.

  • Olive Press Article on Continental Wealth Management

    Olive Press Article on Continental Wealth Management

    A SLICE OF THE ACTION by Joshua Parfitt of the Olive Press

    EXCLUSIVE: Expats who lost millions to dodgy finance firm CWM fear action group boss may be scamming them too.  It is a sad fact that people who have been victims of a scam will never fully trust anybody ever again.  One thousand people once trusted the slick advisers at CWM with their life savings – and around £50 million was destroyed in the process.  I am now in the front line, and am often the object of mistrust, doubt or – as this journalist puts it – outright fear.  That is the nature of this matter – and when it happens I stand up and deal with it.  The Olive Press journo, Mr. Parfitt, gave me the right to reply to this piece of “journalism” – and this is it.  In bold.

    Angry expats pursuing lost millions in the CWM financial drama have hit another roadblock.  There is no roadblock.  It takes time to put together a viable route to recovering the lost funds.  It isn’t easy and it isn’t cheap – if it were, then everybody would be doing it.  We have indeed hit several major setbacks: OMI agreed to settle in May 2018 and we worked out a payment plan to amortise the redress payments over a workable period.  However, OMI reneged on the deal.  We are now putting in place plans to take legal action against OMI and the other life offices and have now secured litigation funding to deal with this.  We also had plans for legal action in Spain, with a law firm in Marbella.  But despite our best efforts, could not obtain adverse costs insurance (to protect the claimants against the eventuality that we would lose and would end up paying the other sides’ costs).  So we now have litigation funding and are using another law firm on the Costa Blanca and this litigation will be launched on Monday 29th April.

    Sources told the Olive Press a woman supposedly fighting their claims is in fact taking money while in a year and a half has not managed to win a cent of compensation.  Of course the “sources” remain anonymous, while I do not.  But that is to be expected.  I know who some of the “sources” are and they include CWM clients as well as – probably – a firm of ambulance chasers (a claims management company) and some of the advisers.  But, despite the malicious actions of the “sources” who are CWM victims, I will still represent them and help them recover their losses. 

    It comes as Denia court finally began proceedings against CWM’s former directors, including boss Darren Kirby, who we revealed had fled to the UK, this month.  He hasn’t fled to the UK.  He is in Denia.  And is meeting me week commencing 29th April during my meetings in Moraira with our lead cases and lawyer.

    But now disaffected investors have accused expat Angie Brooks, director of a Spain-based company Pension Life, of abuse of trust – a claim she denies.  It is interesting that these so-called “disaffected investors” are apparently happy to discuss their accusations with a freebie magazine’s journalist (although not happy to be named), but haven’t told me directly of their disaffection.  They all have my email address – but if they report their disaffection anonymously to a journalist, how can I put things right or reassure them?  The answer, of course, is that I can’t.  So this calls into question whether these so-called investors either exist at all, or actually want to be reassured.

    It comes after she took on scores of CWM casualties in 2017, charging them £1,500 for a year’s service and a £750 annual retainer.  Every member was free to take their own independent action; pay their own legal fees and decline to join Pension Life.  I have never solicited members and every person has joined knowing full well what the fees were and also how long and challenging the redress avenue was likely to be.  Most solicitors taking on a new client in Spain would charge a minimum of 3,000 EUR plus VAT and then would then charge on an hourly basis thereafter.

    One member of her Pension Life action group said he was left “desperate and depressed” as he could not continue to front the huge fees.  And yet this member has not told me?  If this supposed member is also desperate to get his money back, is he therefore going to pursue another route?  And how much will this cost him?  And how irresponsible was it of Mr. Parfitt not to tell me that one of my members was too desperate and depressed to tell me?  Mr. Parfitt has claimed to be trying to get hold of me since the beginning of April, and yet I don’t have a single email from him (either on my Pension Life email or my personal one – both of which are freely available).

    Now, the Olive Press has discovered that a UK debt collection company has been appointed to pursue a £600k loan taken out by a company for which Brooks is still active director.  This is not true.  There is no debt collection company – there is an insolvency practitioner.  And this firm – Wilkins Kennedy – was appointed several years ago.

    The liquidator, Louise Brittan, from Wilkins Kennedy, has worked on cases involving politicians Jonathan Aitken, Neil Hamilton and singer Kerry Katona, and is now chasing Brooks for the money.  Wilkins Kennedy has appointed solicitors in London and I am dealing with them direct and have been for some years – as is my duty as a director of the company.  Reigate Town Club was wound up on 10th October 2011 but I have never resigned as a director as I take my obligations seriously and if there is ever any chance of getting any of the money owed to the company by the former directors, I will be eager to do everything possible to help bring them to justice.

    The company, Reigate Town Club Ltd – which has not filed accounts since 2009 – owed £617,761 to the unnamed debtor, according to the UK’s official Companies House.  This journalist has got his knickers in a bit of a twist here.  There is a director’s loan account which is comprised of a sum of money owed by former directors Stewart and Marc Simpson to the company, and a sum of money owed by the company to me.  The Simpsons owe the company a total of £617,760.83.  The company owes me £240,050.36 – plus £40k approximately I spent trying (abortively) to sue the Simpsons.  The company was wound up by HMRC because they taxed the Simpsons’ directors’ loans and there wasn’t enough money to pay the tax (as it was all in the Simpsons’ trousers).  These are all facts which are in the public domain – so perhaps Mr. Parfitt might like to study how to become an investigative journalist – and not just listen to idle tittle tattle by “disaffected” unnamed people.

    Another of Brooks’ companies, Thames Trust Ltd, was ordered to close by the UK government in 2016 following an insolvency investigation.  Thames Trustees was not my company.  I took over as a director of Thames Trustees, Imperial Trustees and Highgate Trustees in 2014 and was removed immediately by the scammers.  Thames and Imperial were companies set up by Stephen Ward of Premier Pension Solutions to act as the trustees/administrators of two fraudulent pension schemes – Capita Oak and Westminster .  Both these schemes were placed in the hands of Dalriada Trustees by the Pensions Regulator and are now under investigation by the Serious Fraud Office.  The companies had been directed by a string of “puppet” directors who had all headed for the hills when the Insolvency Service started investigating.  Without a director of the trustee companies, the scheme members were in danger of facing unauthorized payment tax charges as the schemes would cease to be registered pension schemes without a trustee (on top of losing the whole pensions as the assets were arguably worthless).  Thames Trustees was wound up by the Official Receiver on 11th July 2016. 

    In alarming circumstances, it was found that the company received “significant commissions” without the knowledge of its clients.  I don’t know where the journo gets this information from.  The company shows zero income in the accounts on Companies House and owes £130,071 to its creditors.  If Mr. Parfitt has credible evidence (as opposed to gossip from his unnamed sources) about undisclosed income, he should report it to the Serious Fraud Office (who will, of course, want to know who his sources are).

    A British legal source told the Olive Press that Brooks, who lives in Granada, has “zero licenses, regulatory status or legal entity in Spain”.  I am not practicing in any capacity that requires a license and I don’t have a company registered in Spain.

    Another source demanded to know where the “huge retainer fees” have gone.  There were no “huge” retainer fees.  This journo really must learn not to rely so heavily on unnamed “sources” as this discredits the provenance of the source information and is just lazy journalism.  The first law firm I was using in Marbella was charging 3,000 EUR plus VAT per client – plus a 30% success fee.  Another law firm quoted me 75,000 EUR plus VAT just to look at the case.  By comparison, the Pension Life membership fees are very modest.

    The demands come after the Olive Press reported that three victims, who collectively lost “hundreds of thousands” to CWM, are having their case processed by Denia Court.  What “demands”?  The journo has mentioned one demand from an anonymous “legal” source.  There is no connection between the action in the Denia Court and the action I am taking.  I have no idea who is taking the action in Denia.

    We revealed that Kirby failed to turn up after other directors appeared in court last month.  I wonder if Mr. Parfitt has actually seen any copies of the court documents or whether he is, again, relying on hearsay emanating from his mysterious unnamed sources.

    Brooks confirmed to the Olive Press that she is “not a licensed solicitor” (and I have never claimed to be – I am a tax adviser) but said the unpaid loan (at Reigate Town Club) was linked to two previous directors before she took her position.  She said she has “nothing to do” with fraudulent practice at Thames Trust Ltd (Thames Trustees) and only has one tax return overdue for ACA Pension Life Ltd.  She added her fees were “far below” what other licensed solicitors charge and said the lack of legal action was due to significant challenges in finding a suitable legal practice to take on the case.  The Olive Press continues to investigate.  Does it?  Since speaking to the journo late last night, he has asked no further questions and requested no further evidence.  I asked the journo why he hadn’t written anything about the huge amounts of money lost by the victims of the CWM group – and the appallingly bleak future so many of them are facing due to having had their life savings decimated.  But he didn’t seem to be particularly interested in that aspect of this case.

    Contact us at the newsdesk@theolivepress.es if you can help.  Help to do what?  Help Mr. Parfitt become a credible reporter?  I really do wish him the best of luck with his journalistic career – but writing half-truths and quoting anonymous sources without credibility is never going to lift him out of the freebie rag ranks and into the realms of serious professional journalism.

    The CWM story is a sickeningly fascinating summary of what is so terribly wrong with financial services in Spain, Europe and beyond.  Mr. Parfitt could have used his talents and energies to help put this right.  He could have focused on the parties who engaged with the systematic destruction of £50,000,000 – instead of spinning half-truths and idle gossip into an inaccurate and untruthful piece of very poor journalism.  This piece benefits nobody – and does nothing to help the victims get their money back.  Shame on you Mr. Parfitt.  You may have tickled a few bitter people – but you have entirely failed to expose the root of the problem: unscrupulous insurance companies who manipulated and abused consumers, advisers and trustees alike.

    There will, of course, be a few people who will be delighted by Mr. Parfitt’s piece. 

    I can think of one little bald guy with bitten fingernails who stinks of fish and works for a claims management company.  Ditto several rogue (unregulated) advisers who have picked off orphaned clients and taken them from the frying pan and into the fire.  I have no doubt they will all be buying you a beer or two in the next few days.

  • Who killed the pension? Scammers; ceding providers; introducers; HMRC?

    Who killed the pension? Scammers; ceding providers; introducers; HMRC?

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

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

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

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

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

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

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

    Pension Life Blog - Whose to blame, scammers, ceding providers, receivers?

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

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

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

    The burning question is:

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

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

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

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

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

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

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

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

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

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

     

     

     

  • Time for all pension providers to wake up and stop pension scams

    Time for all pension providers to wake up and stop pension scams

    The recent PSIG (Pension Scams Industry Group) Scams Survey Pilot 2018 has identified seven “key” findings in their survey. As scam watchers, we are well aware of these points and are, of course, glad they have been highlighted.

    PSIG’s key finding are set out below.  So let us admit one key fact:

    ALL PENSION SCAMS START WITH A TRANSFER BY A CEDING PENSION PROVIDER.

    It is interesting that PSIG chose three particular providers to give their answers to the questionnaire sent out:  XPS Pensions Group, Phoenix Life Assurance Company and Standard Life Assurance Company.  I have no doubt they chose these three providers because of their extensive first-hand expertise at facilitating financial crime.  In the Capita Oak and Westminster scams – distributed and administered by serial scammers XXXX and Stephen Ward – and now under investigation by the Serious Fraud Office – Phoenix Life and Standard Life handed over dozens of pensions to the scammers.  In Phoenix Life’s case, the total came to nearly half a million pounds’ worth, and in Standard Life’s case it was well over one million.

    While there is, of course, substantial hard evidence that both the Pensions Regulator (formerly OPRA) and HMRC had been giving the industry plenty of warnings about scams long before the Scorpion Campaign was published on Valentine’s Day in 2013, it is also true that providers such as Phoenix Life, Standard Life – and other favourite financial crime facilitators such as Aegon, Friends Life, Legal & General, Prudential, Royal London, Scottish Life and Scottish Widows – carried on handing over millions to the scammers well into 2014, 2015 and beyond.  And, in fact, they are still at it today.

    The “Key Findings” do throw up some interesting facts:

    “Information on scams is not readily available at an organisational level”.

    Seriously?  Don’t these organisations know how to do research?  Do they really not know what to look for?  They’ve had enough experience over the years – and have had enough examples of spending vast amounts of time trying to cook up reasons to deny complaints against their incompetence for handing over pensions to scammers – to write a whole encyclopedia about scams.

    Organisations (such as Phoenix Life and Standard Life) could try talking to TPAS, or tPR, or the FCA, or the SFO, or Dalriada Trustees, or regulators in Malta, the IoM, Gibraltar, Dubai or Hong Kong.  Or some of the thousands of victims – who have lost their pensions due to the incompetence and callousness of the ceding providers – who would readily fill in the blanks.  There really is no shortage of readily-available, free information.  They just need to take the time and trouble to ask for it.  It really isn’t difficult.  They just have to put their box-ticking pencils down for a few minutes.

    “The Scams Code is seen as a good basis for due diligence”

    I agree – it is really great.  But it is also 78 pages long.  Few people have to the time to read, understand or remember such long documents (with too many long words and not enough pictures).  What would be helpful would be to get a few of the worst offenders: Aegon, Aviva, Friends Life, Legal & General, Phoenix, Prudential, Royal London, Scottish Life, Scottish Widows, Standard Life and Zurich, in a room at the same time – and bang their heads together.  And threaten them that if they don’t get their acts together and stop handing over pensions to the scammers, they will be made to read and memorise the 78-page Scams Code and recite it every morning before coffee break.  Twice.  Then snap all their box-ticking pencils in half, and JOB DONE!  It really isn’t rocket science – there are usually some hints which are as subtle as a brick, such as: the sponsoring employer doesn’t exist; or the member lives in Scunthorpe and is transferring to a scheme whose sponsoring employer is based in Cyprus.  Or Hong Kong.  Now, I know there was a bit of a hiccup with the Royal London v Hughes case when Justice Morgan overturned the Ombudsman’s determination.  But dear old Hughes had probably had a few Babychams too many – and it had slipped his mind that the law is supposed to be about justice and common sense.  And that just because a particular piece of legislation has been written by an ass, it doesn’t have to be interpreted with stupidity.

    “Significant time and effort goes into protecting members from scams”

    This, of course, may be true.  I only get to see the cases where the negligent ceding providers do hand over the pensions to the scammers.  I rarely get to see the ones that have a narrow escape.  But what worries me is that I am in the process of making complaints to the ceding providers who have handed over pensions to the scammers, and not a single one of them thinks they have done anything wrong.  So, if they do spend “significant time and effort” doing the protecting bit, how come so many of them still fail so badly?  And then try to deny they failed.  These providers spend very significant amounts of time and effort writing long, boring letters about how they did nothing wrong – letters which must have taken them at least an hour to write.  And yet they won’t spent two minutes checking – and stopping – transfers to obvious scams.

    “The more detailed the due diligence, the more suspicious traits are identified”

    I am a bit suspicious that this indicates a touch of porky pies here.  I’ve never seen any evidence of ANY due diligence by the ceding providers.  A bloke at Aviva once told me that they spent thousands on research and due diligence – but I see no evidence of it.  The problem is, the ceding providers don’t know what they don’t know.  And, to coin one of my favourite phrases: “they don’t know the questions to ask, and even if they did then they wouldn’t understand the answers”.

    Interestingly, if – instead of repeatedly spending hours denying they did anything wrong when they handed over millions of pounds’ worth of pensions to the scammers – they spent some time talking to me and the victims trying to learn what went wrong and what due diligence should have gone into preventing a dodgy transfer, they might learn how to stop failing so badly.

    SIPPS (including international SIPPS) are the vehicle of choice by scammers

    Agreed.  But the scammers still love the good old QROPS.  But whether it is a SIPPS or a QROPS – both of which are just “wrappers” at the end of the day, it is about what goes inside the wrappers.  Where the scammers make their money is in the kickbacks: 8% on the pointless, expensive insurance bond from OMI, SEB, Generali, RL360, Friends Provident etc., and then more fat commissions on the expensive funds or structured notes.

    “Quality of adviser tops the list of practitioner concerns, with member awareness a close second”

    And hereby lies one of the main problems: ceding providers don’t know who the good guys are and who the bad guys are.  And that is because they don’t ask.  And they don’t learn from their mistakes when they get it wrong.  And they don’t care when they hand the pensions over to the bad guys and their former member is now financially ruined and contemplating suicide.  Instead of trying to use their appalling mistakes to improve their performance and understand what “quality” actually means, and how to tell the difference between good and bad quality, they only care about avoiding responsibility for their own failings.

    The problem about “member awareness” is that most people assume their ceding provider will do some sort of due diligence.  They think that words like “Phoenix Life”, “Prudential” and “Standard Life” convey some sort of professionalism or duty of care.  Most members are simply unaware of the appalling track record of these providers – and the extraordinary and exhaustive lengths to which they will go to avoid being brought to justice for their negligence and laziness.

    “Sharing of intelligence would help avoid duplication of effort”

    Oh, how heartily I agree!  I remember a year or so ago, I shared some intelligence and a few beers with a nice chap from Scottish Widows.  We met at one of Andy Agathangelou’s symposiums in London – the subject of which was pension scams.  The Pensions Regulator was there, Dalriada Trustees were there, Pension Bee were there, lots of interested parties were there (including an American insurer from Singapore), and a couple of victims.  I gave a joint presentation with one of the victims who described how he had been scammed and how his provider had handed over his pension so easily – well after the Scorpion watershed.  The nice chap from Scottish Widows asked the victim why he hadn’t called the Police.  The victim replied: “I am the Police”.

    It was very telling that the room wasn’t full of delegates from Aviva, Phoenix Life, Prudential, Standard Life etc.  None of them were interested.

    Not a single provider has ever phoned me up to ask for advice, or to arrange to speak to some victims to learn something about how they were scammed and how and why their ceding providers had failed them so badly.  There are so many victims all over the UK and the rest of the world.  And what they all share is a passion to try to prevent other people from being scammed by the bad guys and failed by the bad pension providers.  So this invaluable intelligence is freely available.

    Until and unless the providers develop a conscience, they are going to continue to fuel the pension scam industry – and nothing will change.  And the 79-page code might just as well be consigned to the bathrooms of Aegon, Aviva, Friends Life, Legal & General, Phoenix, Prudential, Royal London, Scottish Life, Scottish Widows, Standard Life and Zurich.

     

     

  • Cold calling scammers target expats after the ban in UK – BBC4 You and Yours

    Cold calling scammers target expats after the ban in UK – BBC4 You and Yours

    Pension Life Blog - Ten essential standards for every adviser and their firmEvery year we are seeing an increase in the number of victims falling for pension and investment scams. Despite warnings in the public domain and a huge array of information about how to avoid falling victim to a scam, it seems the scammers are so skilled at their sales techniques, that even the cleverest of people can fall for their slick pitches. Often the scammers use cold-calling techniques to initiate these pitches: using emails, texts, mail shots and the good ol’ phone.

    We finally saw the introduction of the cold calling ban come into place in January 2019, with huge fines being threatened to firms using these techniques to promote pension sales. We have already written about the firms who have changed their scripts to escape the fines: Cadde Wealth Management is one of these firms.  On top of this, we now find that the cold-calling ban has just encouraged the scammers to divert their efforts to British expats.

    BBC4 You and Yours recently discussed how the cold-calling ban in the UK has seen a change in the scammers’ behaviour. Unfortunately, this is not a change for the better. As the ban only applies to the UK, scammers are targeting expats instead. This means UK pension holders are still the main target for pension scammers and are at greater risk than ever.

    Pension Life Blog - Ten essential standards for every adviser and their firmListen to the show here:

    https://www.bbc.co.uk/sounds/play/m000241

    Interviewed in the programme, Jamie Jenkins says he has noticed this change.  He is Head of Global Saving Policy at Standard Life. He states in the report,  “In recent months we have known that the cold-calling ban is coming in and criminals know that too. So we have seen a switch from cold calls originating in the UK to UK customers, to overseas calls to expat customers living abroad.”

    Ironically, Standard Life has been one of the worst performers in terms of ceding pension providers who have recklessly and negligently handed over millions of pounds’ worth of pensions to the scammers.  Completely ignoring the Pensions Regulator’s warnings in 2010, they shoveled £millions across to pension scams such as Ark, Capita Oak, Westminster, Continental Wealth Management, Global Fiduciary Services and many other QROPS scams.

    Here at Pension Life, we know that expats are not just a new target of cold callers – many expats have already fallen victim to horrific pension scams, like those who lost large chunks of their pension funds to CWM. Continental Wealth Management fraudsters like Darren Kirby, cold-called victims, then followed through with repeat house calls and persuaded around 1,000 UK pension holders to transfer out of safe DB pensions into QROPS and illegally-sold life insurance bonds (such as OMI, Generali, SEB, RL360). With promises of high returns, a lump sum in cash and greater freedoms, many professional and well-educated people fell for the scam.

    Many victims are now trapped in bogus life “bonds” that are falling in value yearly, while the life offices continue to take their quarterly charges – further damaging the impaired funds. Fortunately, the Spanish regulator – the DGS – has outlawed the selling of bogus life assurance policies this week, ensuring there should be fewer victims of this type of scam.

    Here is our cartoon video reconstruction of how the Continental Wealth Management scam worked:

    The BBC programme also talks to a Continental Wealth Management victim, Rebecca Cooke, who lost £75,000 after transferring out of an NHS pension and other secure investments.

    “We were approached in 2012/13 by a company based in Spain (Continental Wealth Management) who were offering us advice about moving our private pension from the UK into another investment scheme based in the EU.  We went with them, but it became blatantly obvious that we had suffered catastrophic losses in our pension and chased them up about what was happening. They had actually invested our funds badly and put them in high-risk rather in low to medium risk funds.  Consequently, we had lost that amount of money (£75,000).”

    She said she feels stupid for falling for the scam, but she is not alone in believing the shiny sales pitch of these scamming criminals.

    It seems the only way to escape the scammers – anywhere in the world – is not to fall for their lies.  But the challenge is to know what is true and what is false.  And that isn’t easy – the scammers are very clever and can adapt quickly to invalidate public warnings and even use them to their advantage.  In addition to the scammers, there are now offshore claims management companies circling like vultures and conning people into believing that complaints against offshore firms can be upheld by UK-based ombudsmen – and that claims can be made against the FSCS (Financial Services Compensation Scheme) in respect of Maltese trustees.

    Know what questions to ask your IFA, click here to watch our cartoon

     

  • Death of the Life Bond (Life of the Death Bond?)

    Death of the Life Bond (Life of the Death Bond?)

    Attention financial advisers in Spain/who provide financial advice to Spanish residents.            

    18th 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 11th February.  Unsurprisingly, CWM failed to comply.  CWM had collapsed in September 2017 and all the scammers who worked for the firm headed for the hills (or Australia).  We are now enforcing this order by criminal action against all those responsible.  This also opens the way for similar action against any other firms who have mis-sold insurance products without complying with the Spanish regulations.

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

    Why should the use of life bonds be strictly controlled?

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

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

    There will be criminal proceedings – and these will extend to the life offices themselves for profiting from financial crime.  The many victims whose life savings have been destroyed by the life offices and their toxic practices will welcome this news.  The victims themselves know intimately the numerous faults of the life offices:

    • accepting business from (and paying undisclosed commissions to) known scammers and unregulated advisory firms
    • offering high-risk, unregulated funds such as Axiom, LM, Premier New Earth and other no-hoper funds
    • offering professional-investor-only structured notes from providers such as Leonteq, Commerzbank and Nomura
    • reporting the inexorable losses but taking no remedial action
    • locking victims into the expensive, pointless bonds long after the majority of the funds had been destroyed

    This latest development with the DGS judgment will help the victims take action against negligent life offices such as Old Mutual International and Friends Provident International.  This will be a powerful weapon in the recovery process against these parasitic, negligent and greedy insurance companies.

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

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

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

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

    Chief Inspector of Unit – Ministry of Economy and Enterprise

    Secretary of State for the Economy and Business Support

    General Directorate of Insurance and Pension Funds (DGS)

     

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

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

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

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

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

    Therefore, the life bond fails on three counts:

    1. it is a useless life assurance policy
    2. it is a useless investment platform
    3. it does not comply with Spanish regulations.  

    I could go on: the life bond is expensive; fails to disclose adviser commissions; offers high-risk, unregulated funds; accepts business from known scammers and unregulated firms; allows professional-investor-only structured notes for retail investors.  The list is endless.

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

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

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

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

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

    “Before an insurance contract is concluded, the insurance intermediary must, as a minimum, provide the customer with the following information:

    1. a) The broker’s identity and address.
    2. b) The Register in which the broker is registered, as well as the means of verifying such registration.”

    This rarely happens in practice – unless the broker is one of the very few professional and ethical firms in the expat world.  An adviser might claim to be based in one jurisdiction, but could – in fact – be based in an entirely different one.  “Passporting” is often misused as advisers “fly in under the radar” and provide advice in jurisdictions where they have no legal right to operate.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    THE DEATH OF THE LIFE BOND

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

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