RL360’s acquisition of Friends Provident International may be set to ruin even more investors internationally. It will certainly increase competition with Quilter (or Skandia, or Ann Summers or whatever OMI are calling themselves this season).
The biggest question – and one which International Adviser’s Kirsten Hastings forgot to ask RL360 David Kneeshaw when she interviewed him on 16.7.2020 – is:
Why on earth RL360 wanted to buy a company which is being sued for £millions after thousands of FPI victims lost their life savings in a high-risk fund mis-selling scandal?
During the International Adviser 12-minute video, Kirsten never brought the subject up once. Forgetfulness? Deliberately avoiding the issue? FPI is being sued alongside Quilter – main sponsor of International Adviser.
Kneeshaw seemed like an amiable fellow in the interview as he proudly announced that “all good things come to those who wait” (a sentiment with which thousands of death bond investors would strongly disagree). Kneesup also proclaimed that he is glad to be able to integrate the businesses and that the marriage has produced a “good, strong, stable company”.
But the question hung in the air like a fart in an elevator: what about the £100m+ worth of high-risk funds which were “entirely inappropriate for unsophisticated investors” (International Adviser’s words – not mine). And why didn’t Kirsten mention it? And why didn’t Kneesup explain what provision he has made to compensate thousands of FPI’s victims?
Kneesup confirmed that RL360 paid £259 million for FPI (£209 million in cash and £50 million in deferred cash). So has he kept back another hundred million or so to settle FPI’s liabilities to its victims who have lost their life savings?
Victims staring financial ruin in the face will want to know why RL360 didn’t just pay – say – £159 million for FPI and keep back £100 million for the victims. Or perhaps the £50 million in “deferred cash” is being put aside for that?
Or maybe, FPI should have paid RL360 to take the company away and sort out the toxic and destructive mess which has ruined thousands of policy holders.
Kneesup went on to proclaim that the future of FPI “is secure and can carry on as normal”. Well, I bloody well hope not! “Normal” has been an absolute disaster which has resulted in a catastrophe of epic proportions. FPI was giving terms of business to hordes of unlicensed, unscrupulous, unqualified “advisers” (in reality, just bond salesmen).
These “Chiringuitos” (as the Spanish regulator refers to them in their warning about financial scams) have destroyed £ millions in their relentless quest for commission.
The deeply iniquitous practices – so enthusiastically facilitated by life offices – included charging victims fees, plus an 8% commission on the (entirely unnecessary) insurance bonds, plus further commissions on the toxic investments offered by the life offices.
Another “hot” topic that Kneesup failed to mention was how the RL360/FPI “marriage” intends to compete with Quilter in the “race to the bottom” of offshore financial services. Of course, it won’t exactly be difficult since Peter Kenny – CEO of Quilter/Ann Summers – will deal with any old “advisers”. Kenny certainly isn’t fussy: the sole director of one of his leading “clients” from 2010 to 2017 was a former prostitute and porn star (whose firm destroyed much of the £100m placed in insurance bonds and invested in structured notes).
However, I really do like to give people the benefit of the doubt. Assuming that Kneesup does have at least a few honourable intentions, here are some friendly suggestions as to how the RL360/FPI marriage could help clean up this toxic “death bond” industry:
- Don’t deal with advisory firms which don’t have a license
- Don’t deal with advisory firms which don’t have an investment license
- Don’t deal with advisory firms whose “advisers” aren’t qualified
- Don’t deal with advisory firms who have a history of investing their victims’ life savings and pensions in toxic crap (high-risk, professional-investor-only funds and structured notes)
- Don’t pay commissions – if the insurance bonds are any good, and the clients genuinely need them, the products will sell themselves
- Don’t tie investors in for fixed terms – give them the flexibility to get out whenever they want or need to
- Don’t offer investments – the industry has shown it is incapable of performing asset reviews and weeding out toxic rubbish
- Keep the fees in proportion to the fund value – allow flexibility/drawdown without unnecessary “drag” on the funds
- Only allow advisers to sell insurance bonds when they are actually needed (which is hardly ever)
But the biggest friendly suggestion of all to the amiable Mr. Kneesup with the fringe on top is:
Address the elephant in the room: pay compensation to the thousands of FPI and RL360 victims who have lost their life savings and are facing financial ruin.
In his euphoria at the completion of the acquisition of FPI, Kneesup must remember that the insurance bond is the World’s biggest cause of offshore financial crime. Insurance bonds have been ruled by the Spanish Supreme Court as being invalid for the purpose of holding investments. Virtually all insurance bonds ever sold in Spain have been done so illegally – it is a criminal offence to sell insurance bonds outside the precise stipulations of the Spanish insurance regulations in Spain.
I really hope that the elephant in the room will be dealt with. David Kneeshaw has a golden opportunity to help reform the offshore financial services industry. He can emerge from the appalling news of this marriage made in hell as a hero in shining armour – or just another sordid perpetrator of scams and financial crime. He can put Quilter’s Peter Kenny to shame, or become just as bad as him. The World will be watching. Let us hope Kneeshaw chooses wisely – and becomes “Kneesup” rather than “Kneesdown”.
As you say in one of your comments above “Let’s address the elephant in the room” This particular ‘elephant’ I’m referring to is Momentum Pensions Malta who, last week, were finally destroyed by the Maltese Arbiter for their consistant failings in their duties. But, strangely enough, not a word has been mentioned by our ‘champion’ Angela Brooks who loves to wade in knee deep with her usual insults. Why then is there nothing but silence? Possibly because she was in Momentum’s pockets to steer the victims away from them? Possibly because she always advised against the arbiter unless going through Pension Life and paying 1,500 pounds? Possibly too, because once again she has done nothing of value to anyone except take money from the people that need help and she has no intention, or capabilities to do so. Any comment would be appreciated!
Well said Sharron, we agree totally! The silence is deafening! Normally she can’t keep her mouth shut! Only when it comes to Momentum does she stay away, or the other suspects that allegedly pay her to keep quiet. Pretty obvious really isn’t it who’s side she is on, and it aint the victims, never has been! She is a blagger, not a blogger!!!
I saw that Arbiter WIN story published somewhere too Sharron.
Momentum Pensions Malta lost claims without about 50 people I believe, that must’ve been worth a fair bit of money to them all.
Such a wonderful achievement with all these Pension Frauds over the years coming to nothing, I feel delighted for them all, whoever they may be.
Just wish my case would be sorted soon too, so that I actually get a Pension at some point in my life.
So, yes I’m too suprised that nothing has yet been mentioned on this page!!! Weird!!!
I always advised against the Arbiter route if the complainant was not represented by a solicitor. If Momentum appeals, then the complainant will need to defend their complaint before a civil judge in Malta and will need a solicitor to act for them in court. It is always much harder for a solicitor to fight for a complaint which was not written in 100% correct legal terms, because there is the risk that there could be legal loopholes in both the complaint and the response by the ombudsman or arbiter. In the Bank of Valetta case, 400 complainants had their complaints upheld by the Arbiter, and the Bank of Valetta has appealed and now the case is going to spend several years going through the civil courts – with the complainants being represented by one of the top firms of lawyers in Malta – in a case which will cost hundreds of thousands of euros to fight. I think we should wait to see if Momentum appeals the Arbiter’s decision before jumping to any conclusions.
But, it’s very clear that no-one needs a Solicitor to complain the the Maltese Arbiter, they submit their claim with proof to the Arbiter & pay a small fee. I believe this is the process should be available to everyone, not just those who can afford it.
The Arbiter has now ruled that Momentum Pensions Malta should reimburse 70% of the NET losses of those complainants & has given multiple points of law for doing so, which I’m pretty sure someone of his/her standing would not get wrong.
In their own procedures it states that Momentum can only appeal on a point of law, not because they don’t like the verdict & that appeal will be through the court to the Arbiter – nowhere does it say that the complainant needs to be represented in court OR employ a Solicitor to do so.
Not sure where you get your information from, but you must have missed a press report stating that they were going to Appeal on the 1st day of release of the decision, so I guess they must have some pretty hot lawyers to find an error in the Arbiters ruling so quickly & know they intended to appeal!!!!
You are right. Nobody needs a solicitor to make a complaint to any ombudsman or arbiter. But ombudsman and arbiter decisions are appealed regularly – and sometimes the appeal succeeds (and sometimes it doesn’t). In the case of Hughes v Royal London, an ombudsman’s decision was appealed and the High Court overturned the ombudsman’s determination on a point of law. In the case of Bank of Valetta, the Arbiter found for the appellants, and the bank has appealed – so all the appellants will now have to go through the civil process, with a very expensive law firm. We don’t yet know if Momentum will appeal, so why not suspend judgment until we know for sure?
Angie, your statement above is incorrect regarding Bank of Valletta. Seriously, you shouldn’t comment on things that you do not understand, it is misleading!
Firstly, you might want to update yourself with regards to the BOV appeal case and secondly, note that the reason they appealed was on a point the arbiter made in paying ALL the victims including those which had already accepted compensation from BOV and signed away any further rights.
Regardless as to whether Momentum Pensions Malta go to appeal or not, if you were doing your ‘job’ correctly, you would have reported on the win that has do far been achevied.
IF MPM do go to the court of appeal it will be on something in the arbiter’s final decision and not our initial complaint. Please stop misleading people with your scaremongering.
As you say in one of your comments above “Let’s address the elephant in the room” This particular ‘elephant’ I’m referring to is Momentum Pensions Malta who, last week, were finally destroyed by the Maltese Arbiter for their consistant failings in their duties. But, strangely enough, not a word has been mentioned by our ‘champion’ Angela Brooks who loves to wade in knee deep with her usual insults. Why then is there nothing but silence? Possibly because she was in Momentum’s pockets to steer the victims away from them? Possibly because she always advised against the arbiter unless going through Pension Life and paying 1,500 pounds? Possibly too, because once again she has done nothing of value to anyone except take money from the people that need help and she has no intention, or capabilities to do so. Any comment would be appreciated!
Weird how you promote ALL pension scams but not the Momentum win isn’t it, or is it??? Secondary scammer or what????
Firstly, you might want to update yourself with regards to the BOV appeal case and secondly, note that the reason they appealed was on a point the arbiter made in paying ALL the victims including those which had already accepted compensation from BOV and signed away any further rights.
Regardless as to whether Momentum Pensions Malta go to appeal or not, if you were doing your ‘job’ correctly, you would have reported on the win that has do far been achevied.
IF MPM do go to the court of appeal it will be on something in the arbiter’s final decision and not our initial complaint. Please stop misleading people with your scaremongering.
The reason I didn’t write a blog was because Momentum has 20 days to appeal and I didn’t want to write an incomplete piece. However, I may publish something next week even if there is no news on the appeal. If you think that what I write is “scaremongering”, may I humbly suggest you stop reading it?
Of course they have 20 days in which to appeal but what has that got to do with reporting the win so far?If you were going to wait for all things to be completed before blogging then you’d have nothing to blog about! You should report on the various stages as they happen. I am not referring to myself when I mentioned your scaremongering tactics, but I humbly point out to you, that there are people who read things that are not as well informed.