How rogue ‘financial advisers’ in Spain stung British pensioners for millions

April 18th, 2015
Story by Katie Morley | The Telegraph

A Telegraph Money investigation has found pensioners falling prey to rogue ‘advisers’ along the Costa del Sol. Their nightmare serves as a timely warning for people retiring in the UK

Calella in Spain

The Government is warning savers to be on ‘red alert’ for salesmen pushing ‘too good to be true’ investments, which could include shares in foreign property Photo: Alamy

When Malcolm and Fiona Straw handed their life savings to their financial adviser to invest in 2007, they were confident their money was being placed in good hands.

They met Robin Rogers, at one time an authorised UK financial adviser, through their local golf club in Marbella, Spain. A number of Mr Straw’s golfing friends had spoken very highly of him.

Mr Straw, an ex-property developer, and his wife, a former teacher, retired in 2007 having sold a flat for €100,000, and they asked Mr Rogers for help investing the proceeds. They wanted to generate an income to replace the €7,000 yearly rent. They invested another €50,000 in 2012.

Despite his credible appearance, Mr Rogers was working for a firm called Offshore Investment Brokers (OIB), which was not authorised to sell investments. He invested the Straws’ money in two highly risky unregulated funds, which suffered substantial losses. Mr Rogers withheld their statements and misled them into thinking their capital was safe. In fact, the €7,000 they drew each year was eating what remained of their money, and by 2014 nothing was left.

Their unfortunate story serves as a timely warning to savers here and abroad, as sales of inappropriate investments are expected to rocket this year as one of the unintended consequences of the new pension freedoms, which give over-55s unfettered access to their retirement funds.

The Government and other, legitimate advisers are warning savers to be on “red alert” for salesmen pushing “too good to be true” investments, which could include shares in car parks, “carbon credits”, foreign property, fine wines and a range of other assets – loosely categorised as “unregulated” funds.

To gain “regulated” status, both investments and advisers must meet standards laid down by the appropriate regulator, which in Britain is the Financial Conduct Authority (FCA).

Malcolm and Fiona Straw’s fund lost 96pc of its value

If money remains within a pension it is almost certainly overseen by a regulated firm, conferring protection for the investor. Once the cash is withdrawn – and an estimated £24bn will be withdrawn over the next year – it is at risk of rogue “advisers” pushing unregulated investments.

Telegraph Money has found evidence of such investments being marketed through cold calling, home visits, golf club social events, “pension review” websites and by salesmen claiming connections to bona fide, regulated financial advisers.

According to the FCA, around 75pc of unregulated investments result in losses for private investors. But the people selling them are well trained to ensure they sound very attractive. Typically they make promises of “guaranteed yields” or high income payments, something many retired people desperately need.

In November last year, Mr Rogers visited the Straws’ family home and reassured them that their savings were worth a healthy £94,000. But then, when one of their income payments came through in chunks instead of a single lump sum, they had misgivings.

Several years previously they had received two warning letters about the balance in one of their investments, as it had suspended payments because of “liquidity issues”. But they said Mr Rogers told them this was a mistake and urged them to destroy the papers.

He also said the staggered payment was a mistake, and that he’d applied for “compensation” for lost interest.

The investment was held within a bond provided by Old Mutual Wealth, a properly authorised, and entirely legitimate, business. It confirmed to Telegraph Money that between September 2007 and December 2014, when the Straws’ money was invested, one of their funds, an unregulated collective property investment called Glanmore, lost more than 96pc of its value. Another, a fund called the Protected Assets Trust, which invested in traded insurance policies, fared much better, but still failed to make any returns in the period.

In December the couple were horrified to receive a “surrender valuation” letter from Old Mutual, the company holding the investments, showing that their fund was worth £15,723 after charges of £4,762 had been deducted.

No longer able to get hold of Mr Rogers, and feeling increasingly desperate, the Straws complained to Stein Group, a subsidiary of a larger regulated firm, Blacktower Financial Management, which acquired OIB in 2012.

They met the director, Stuart Langan, who looked into their affairs and admitted that Mr Rogers had been at fault. But Mr Langan claimed that his firm was not responsible for their losses as Mr Rogers was a subcontractor, rather than an employee.

He claimed to have suspended Mr Rogers, although at the time of going to press he remained listed on Stein Group’s website as a “key member of staff”.

Mr Langan told Telegraph Money: “I have responsibility over Robin Rogers, but I do not have responsibility for him, or for the things he did, prior to working for me. Stein only bought servicing rights of OIB so we are not liable for the Straws’ losses – what it says [about Stein Group acquiring OIB] on our website is a mistake.”

Mr Rogers did not return our emails.

Our investigation unearthed a number of other pensioners who have also suffered major losses as a result of advice given by OIB.

Another British man, Barry Gill, claimed to have lost more than £1m as a result of failed investments and a “scam” equity release scheme he undertook following advice from the firm. He said he had invested £250,000 and that OIB had again split it between Glanmore and the Protected Assets Trust.

Mr Gill (pictured left) alleged that he was advised to take out a £900,000 mortgage on a £1m Spanish villa he owned outright. He said David Driver, OIB’s managing director, had told this would help him reduce his inheritance tax bill. However, it has since emerged that the Spanish government views such arrangements as fraudulent.

Antonio Flores, a lawyer at Lawbird in Spain, who is now representing a number of OIB’s customers who are looking to pursue legal action against it, said: “OIB was operating illegally and was not registered to provide advice. Clients bought into speculative schemes to alleviate inheritance tax but many people have ended up losing their homes.

“There has been a lot of unregulated financial advice going on along the coast here and a lot of British people have lost a lot of money.”

Mr Driver, who arranged the IHT avoidance scheme for Mr Gill and others, returned to Britain in 2012. Today he appears to be back in business running a financial firm called Jorvik Investment Services, based in York, which sells regulated investments to financial advisers.

According to its website, the firm “will only entertain investments that offer the comfort and security that comes from being properly regulated”.

However, according to the register of authorised firms and individuals held by the FCA, neither Mr Driver nor Jorvik is regulated.

Mr Driver declined to comment on the matter.

Have you been the victim of a scam or a rogue adviser, or have you seen anything suspicious? Email: katie.morley@telegraph.co.uk

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