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Footballers in misselling claim over £100m film investments

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Two financial advisers are in the spotlight after reports they earned more than £5m from recommending film scheme investments worth a total of £100m to some of the biggest names in British football.

The Sunday Times reports that David McKee and Kevin McMenamin of Kingsbridge Asset Management invested almost £400m of their client’s money over a four-year spell ending in 2007, with more than £100m in film partnerships.

The pair, whose clients included former England footballers Rio Ferdinand, Andrew Cole, Danny Murphy and Martin Keown, earned more than £5m in commission before HM Revenue & Customs launched a crackdown to demand repayments of historical tax rebates generated by the investments.

Property yacht berths in Florida which did not have access to the waterside, and a Spanish property scheme were some of the investments in which footballers claim they had no idea McKee and McMenamin had an interest.

The footballers also borrowed money to invest, with Coutts lending clients of the advice firm £40m to put into schemes.

The advisers deny any wrongdoing. A spokesman told the Sunday Times that “without exception” the pair’s clients were always advised of the suitability and risks of the schemes and were advised that such investments needed to be part of a balanced portfolio.

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Comments

There are 19 comments at the moment, we would love to hear your opinion too.

  1. Oh goody… we all know where this is going….!!!

  2. As always if there is a claim the IFA’s which have had nothing to do with the advice or losses are more than happy to pick up the tab….again and again and again and again!!!

  3. Whilst footballers may reflect on their desire to avoid paying their taxes it is a great shame that people who are great with a football on the pitch are exploited for their lack of knowledge off the pitch. It is a shame people who earn so much money are advised to save tax rather than to invest wisely. Tax tail wagging investment dog again. Probably best not to become a football pundit looking at the list of ex-players on this list!

  4. Rt Hon Sir Arthur Streeb-Greebling 9th November 2015 at 10:09 am

    Tee Hee! Always knew ther was a God! This proves it!

  5. Some of the blame should be laid at the Inland Revenue door as these schemes have been known for years. Should we not be asking the questions where were the tax inspections over the last 10 or 15 years these schemes have been in operation?

    As for the financial advisers shame on them for bringing our profession into disrepute yet again. I suspect that nowhere did they point out potential risks of the tax evasion scheme. I personally believe that people who devise these types of schemes should be prosecuted for fraud although it does take 2 to tango as the footballers obviously greedy and were prepared to do anything to prevent from paying their fair share of tax.

    I always find it amazing that a footballers can do so much for charity but then seem to think it OK to NOT pay their fair share of tax. After all how do they think that roads, NHS and schools get paid for! They receive an exorbitant amounts of money, so their net income still high. I wonder what will happen to the footballer’s image rights and sponsoring deals after this scandal.

    When our footballers and other celebrities going to learn that you have to pay a degree of tax on your earnings which opens the door to much more safer and tax efficient forms of investing i.e. ISA, OEIC, pensions and investment bonds etc. It may be boring but it doesn’t cost you your entire fortune and leave you on the brink of bankruptcy.

    One last thought, part of the advises job to tell clients things that they don’t want to hear, like they are liable X amount of tax and not some of these high-risk schemes.

  6. “Property yacht berths in Florida which did not have access to the waterside” I couldn’t stop a smile reading this point. Dry docks?

  7. @ Andy Evans: If you delete the words “more than happy” from your post I can agree completely with the rest of it! @ Peter Herd: No you can’t blame HMRC. Better late than never. FSCS should not pay a penny out on this. It’s a fundamental principle of law that cheats should not prosper. If the FSCS pays out then nobody has anything to lose by participating in such schemes. If they work they dodge the tax but if they fail then the FSCS pays out anyway. The FSCS doesn’t seem to get that however.

  8. Charles Campbell 9th November 2015 at 3:25 pm

    This proves the adage – speculate to accumulate. If you lose, someone else will make it up to you.

  9. I’ll get my cheque book out… again. After all I would hate to come between a very wealthy person who sought to avoid their social responsibility to pay their fair share of tax, and their next Bentley. I am really sick of it. The current compensation system is unsustainable. Why should I keep paying for those who can’t see that if something looks too good to be true it probably is, and those that peddle irresponsible investments and then Pxxx off and leave the rest of us who wouldn’t touch a scheme like that with a pooh covered barge pole with the bill.

  10. Neil Leversidge Don’t get me wrong these guys should not be able to claim a penny from the FSCS but what I was trying to say is that the regulator and the Inland Revenue knew all about these schemes for years but did NOTHING.

    How many time do you have to see marketing material showing that it complies with Inland Revenue rules or has been checked with a QC. When you point this out to the FCA or revenue they do nothing. I may not have done this of this one but I did on Harlequin Property and it took the FSA/FCA 5 years to act and has cost us 300 million according to reports.

    The next big thing will be unauthorised advice online but you simple get a response from the FCA that this is not a problem – that is until millions of pounds of complaints start coming in and we have to pay higher fees. Well enough is enough.

  11. When I say US I mean the majority of hard working honest IFA that do not seem the have a voice.

  12. Unregulated schemes again which should not fall within the remit of the FSCS (and nor should advice to invest in them). It’s investment failures such as these that are the root cause of the sky rocketing levies extorted from the rest of us who’ve never been involved with them.

  13. I would question Coutts part in this
    If I recall they have a track record in leveraging clients portfolios
    What security did they require and warnings?
    The IFA says part of a balanced portfolio ! What percentage ? Is the client classified as speculative?
    ‘Follow the money’ and at this point the easiest is compensation from all small ifa’s but there may be a case for dragging Coutts into the frame as they too have deep pockets and look slightly uncomfortable here.

  14. I am sure the ifa played on the fact that Coutts was backing it

  15. Unfortunately I think the FSCS is likely to pick up this tab, as I would think the advisers and their PI insurers will not. Heads the cheats win and tails at the advisers lose. It is truly pathetic and has to stop

  16. Did the advisers who recommended these investments have in place appropriate PII cover to do so? If they did, their policies should pay out. If they didn’t, were they not trading illegally? And, if they didn’t, why didn’t the FSA not know about it and stop them? Of what use are the RMA Returns if they fail to uncover breaches as fundamental as these? Ah well, say the FSA/FCA people, with a shrug of the shoulders: Sherbert happens and none of it ever sticks to us so why should we give a toss?

  17. Correct me if I am wrong, but unregulated advice doesn’t actually trigger a contribution from the advisory firm TO the FSCS, so for the FSCS to pay out on advice related to unregulated products there is a fundamental flaw in their budgeting.
    As an example, we charge clients a (modest) monthly retainer which goes towards a number of unregulated activities we carry out for clients including work on lifetime cashflow planning (we use Prestwood/Truth) whilst this is reported on our RMAR/Gabriel return, I don’t think if triggers any fee for us from the FCA, FSCS or even the FOS. I could be wrong….. If I am right however, provided the firm is recording the information correctly on the RMAR, the FCA/FSCS should be forwarned of a massive mismatch in income fro a firm between regulated and unregulated work and the money they take in fees to meet the potential fallout of unregulated work on the FSCS.
    I will make no comment on this particular case as the advisers are named and I know nothing about them or what they have or have not done and anyone who does comment in a derisory manner (Peter H) may be risking legal action against themselves and with £5million received in commissions, they are probably in a better position to defend themselves than and adviser being critical without investigating he facts. MM have been very careful to simply say “in the spotlight” rather than an accusation of wrongdoing.

  18. Philip my simple point here is why should we pay for unregulated products and advice.

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