View more on these topics

Nick Bamford: Ucis scams shake my optimism

This morning my grandson Barnaby asked me a typical question for a six-year- old: “Grandad, how many days have you been working?” A quick calculation came up with a figure running into many thousands.

There have been exciting days, frustrating days, painful days, enjoyable days and I am sure some days when I really should have followed through with my desire as a youngster to become a zookeeper. But I have to say, if I had my time over again, I would still become
an adviser.

We can really add value to the lives of our clients: helping them plan for their financial futures; preventing them from making some costly errors and helping them mitigate risk, not just from an investment perspective but also ensuring their security if they were to suffer a catastrophe.

As advisers we are able to develop long-term relationships with the vast majority of our clients and get to know them and their ambitions at a level I suspect few other professions are able.

And by being around for the long-term we get to see the outcome of our advice.

But while I have claimed before to be one of the world’s most optimistic individuals, there are some things that really do make me angry and frustrated.

My least favourite acronym is Ucis. Every time I see it written somewhere I see pound signs
flash up. It seems that when the Financial Services Compensation Scheme publishes a list of advisory firms in default these days the common denominator is almost always Ucis.

We have had financial services regulation since 6 April 1988 (you do the math and tell Barnaby how many days that is) and yet here we find ourselves, it seems to me, no better off from a consumer protection perspective than before.

Scams abound. Post-pension freedom and choice the most written about subject is not that of the benefits but of the risk to hard-earned pension funds due to scammers. Did no one in the Government or at the regulator see this coming?

And who pays for the consequences of the scammer’s actions? Well, where that “scam” involves the combination of adviser/Sipp/Ucis you can bet your life it is going to be down to the adviser community to pay to sort out the mess. By the by, I also get annoyed when I read that the FSCS “pays compensation” to the scammed consumer. No it does not, we do. The FSCS pays no compensation at all; it simply administers the payment.

It does not take a genius to work out that what the FCA has to do is ask every Sipp provider to give them a list of advisers that have set up Sipps into which have been invested Ucis products. They can then focus their supervisory efforts in the right places.

I do not know how many more days I have to work as an adviser (many more I hope) but I could well do without any more reports of Ucis scamming.

Nick Bamford is executive director at Informed Choice


FCA interior logo 620x430

FCA backs asset manager calls for ‘systemic risk’ rethink

The FCA says “big questions” need to be asked before asset managers can be branded as systemically important, following a consultation paper on the designation from the FSB. Martin Wheatley, chief executive of the UK regulator, says asset managers should not be singled out and more thought needs to be put into the system, reports […]


Hornbuckle and Pru launch new Sipp

Hornbuckle and Prudential have launched a new Sipp that combines the PruFund range of funds with full access to the new pension income options. Clients will be able to switch between the range of PruFunds and have the option of adding capital guarantees. The Sipp will allow access to the new pension income options, flexi-access […]


Towry appoints Barclays Wealth vice president as adviser

Towry has hired Michael Martin as a wealth adviser for its London office as the firm expands its presence in the city. Martin was previously vice president of Barclays Wealth & Investment Management, a role which he held since 2010. Before Barclays he worked in financial planning at RBS and Sedgwick Independent Financial Services. Towry […]


Thomas Miller recruits Towry director

Thomas Miller Investment has appointed Matt Swatton to head up the newly opened Birmingham branch as the company seeks expansion in the UK. Swatton joins the company from personal financial advice and investment management firm Towry, where he was a director of wealth management and financial planning. Thomas Miller Investment managing director Matt Phillips says: “I am really pleased that […]


News and expert analysis straight to your inbox

Sign up


There are 9 comments at the moment, we would love to hear your opinion too.

  1. If it is not UCIS it will be something else until the FSCS levy is removed/replaced. The FSCS levy has been around for years and it is only now that head honcho at FSCS has actually agreed that it is perhaps not the best way to do things. So much for our lobbying…..
    It is interesting that our firm is paying as much in FSCS levy this coming year (assuming the budget calculator is correct) as in 2004 and our turnover is over twice as high as then. Fraudsters for want of a better word will always find ways of circumventing the rules at the general public’s expense and political pressure means that we end up picking up the bill and one wonders what the next “scam” will be? Our local paper has highlighted a warning from CA regarding pension scammers and I have enormous reservations about the new pension freedoms and the longer term implications for us. Especially when the Government change the goal posts when they realise their sums to not add up.

  2. And don’t forget certain SIPP providers also seem very happy to accept transfers of customers entire pensions into some crazy UCIS schemes (farmland in Africa anyone that doesn’t even have a plan attached to the contract showing what land is being purchased?). They couldn’t care less about the quality of the SIPP business they are administering or treating their customers fairly.

  3. Julian Stevens 5th June 2015 at 10:03 am

    Were the FCA to make any effort to analyse the contents of the RMA returns it requires all advisory firms to submit every year, it could identify just what types of business they’re transacting and take appropriate action to home in on those who may appear to be putting clients into high risk and potentially unsuitable investments. Why doesn’t it? I’m no computer expert, though I cannot help but think that it would hardly be difficult to create a program that would automatically flag up potentially high risk stuff such as UCIS. Is this yet another failure of regulatory monitoring for which, as usual, the rest of us are having to pay?

  4. Nick, good points though I think you’ve mispelled UCIS – isn’t the correct term ‘commission paying UCIS’?

    In seriousness, it’s indeed laughable that the companies who steer clear are the ones who prop up the schemes which bail out (typically) unwitting consumers investing in the weird and wonder invesmtents.

    I spoke with some local business owners this week on broad ‘financial planning’ but 1/3 of the discusison focussed on what ‘regulation’ means when it comes to advice and what protection that brings. Consumers don’t know what to ask and typically do not understand the differences between non advised/advised and – for that matter – the massive range of ‘types’ of advice that exist. Add to that regulated and unregulated – there’s a massive amount to get confused about before we even talk about tax, investments and aims/objectives etc.

    IMHO the very process of disclosure needs to be tightened up so that consumers understand (with no spin from the adviser/provider) precisely what advice/protection they are receiving (if any).

  5. @Paul Stocks UCIS pay commission?!!! Oh that explains it!! 🙂

  6. Julian Stevens 8th June 2015 at 2:04 pm

    Investors will probably be comforted to know that whatever they invest in, even the worst junk product, if it goes down in flames and they lose money, it’ll take only ONE regulated adviser to have recommended just ONE of them to ONE client and the FSCS will gallop valiantly to the rescue and force the rest of us to fund full compensation.

  7. Dominic Thomas 3rd July 2015 at 5:36 pm

    Great points Nick. I’m exasperated too. I also want to agree with Julian (and he has made the point about RMAR data repeatedly) but if some advisers are quite dleiberately misleading clients then it stands to reason that they are also misleading the FCA and probably their PI provider. To my mind, a common PI form is what is needed in conjunction with a proper long-stop to end liability.

    Perhaps I’m over-estmating the power of technology, but I would have thought that providers really ought to be able to produce sales data (otherwise how do they even complete their own accounts) for the regulator and surely every pension has an NI number attached to it, so there ought to be the ability to easily trace pensions. I don’t really understand (perhaps appreciate) why it is so difficult to catch those that commit fraud.

  8. Totally agree with the sentiments expressed above but not all UCIS are toxic and shouldn’t all be tarred with same brush. For example Winton Futures is run by a respected FCA regulated firm and has 23 year track record and $12Bn of assets, but as a Cayman domiciled fund it is a UCIS. There is now a regulated UCITS version at an extra cost of 1-1.5% p.a. – is it worth clients paying extra just to reduce our PI premiums?

  9. Correction; 17 year track record.

Leave a comment