John Rodges had a pension pot of £202,000. He was cold called by a salesman called Dean Stogsdill and persuaded to transfer his pension fund to a QROPS (Qualifying Recognised Overseas Pension Scheme) with Continental Wealth Management (CWM pension scam using high-risk, professional-investor-only structured notes which Stogsdill referred to as “Blue Chip Notes”).
With false promises of greater flexibility, better growth and a 25% tax-free cash lump sum, the transfer seemed like a good opportunity. In reality, it was an offer too good to be true – it was a pension scam- in which the CWM salesmen, Dean Stogsdill and Anthony Downs would reap high commissions. The victims – like John Rogers – would be left with heavy losses.
67 year old John Rodgers, a former research and development chemist, had a collection of occupational and private pensions in the UK. As he had moved to Spain 11 years previously, he had the opportunity of consolidating his pension into a QROPS.
Stogsdill – Chief Executive of CWM, assured John Rodgers that he had been evaluated as a low-medium risk investor, and that the costs would be 1.75% a year over a period of five years – or 1.5% for ten years. This would be based on the original value of the investment, so the promised growth of 8% would not incur any further costs. He was also promised that life assurance would be ‘thrown in’. Unfortunately, John was to become the next victim of the CWM pension scam.
What actually happened was John Rodger’s pension fund was invested into a selection of high-risk structured notes from Royal Bank of Canada – “Blue Chip Notes”. John was told that these “Blue Chip Notes”, were capital protected inside a life bond which would give him life assurance. No real explanation of what a structured note actually was, was given to John.
Structured notes are generally high-risk, FOR PROFESSIONAL INVESTORS ONLY. Therefore, these “Blue Chip Notes” had no place in a pension fund. This investment strategy was part of the CWM pension scam – earning salesmen like Stogsdill big bucks while destroying innocent victims’ pension funds.
Stogsdill also failed to disclose the commissions they were going to earn from the life assurance bond and the “Blue Chip Notes” so even before John’s funds were placed in the toxic high-risk investements – they had incurred a significant loss.
It took just two years for John’s fund to plummet to half of its original value. However, CWM assured him that it was just a “paper loss”, and that the fund would go back up at maturity.
However, CWM went ‘bust’ before the fund could mature. togsdill and all the other salesmen did a runner!
Today John’s pension fund is worth just £60,000 (if he is lucky).
Pension Life has reconstructed John’s story and we would like to share it, in the hope that other people can spot the signs of a pension scam like CWM and avoid falling victim to the scammers – the only ones who profit from investments like these.
It is estimated that up to 1,000 people fell victim to the CWM pension scam and that around 40 million pounds was lost to these high-risk, toxic investments with providers such as
Royal Bank of Canada, Nomura Commerzbank and Leonteq.
The CWM pension scam was promoted by unqualified, unregulated salesmen posing as financial advisers. People who were not legally allowed to provide this kind of financial advice. The scam was promoted with outright lies and undisclosed fees and costs.
A financial adviser that can be linked to not just the CWM pension scam, but also many others including Ark, is a man called STEPHEN WARD (pictured). He IS fully qualified AND registered with the CII. However, he does not have a conscience when it comes to destroying hard-earned pension funds – check out another of Pension Life’s videos:
When considering transferring your pension fund, please make sure you check all the facts and fully understand all of the costs. Ensure your pension is going into a suitable retail investment – not a structured note.
Kim – a member of the Pension Life team is writing a series of blogs about pensions and we would love it if everyone would read and share these. Let’s stop pension scammers in their tracks worldwide by educating the masses on pension rules and regulations.