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Former adviser’s free pension review business exposed

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A firm run by a former financial adviser is the subject of a Panorama investigation into free pension reviews and Cape Verde investments.

The BBC programme, which aired last night, investigated the Resort Group, run by chief executive Robert Jarrett – who previously worked at Prudential.

It sent an undercover reporter to a call centre in Derby, operated by Lifestyle Connections, offering free pension reviews from First Review Pension Services.

Both are owned by the Resort Group.

The reporter, who poses as a prospective employee, is told to lie to people with the aim of getting “everyone to invest in Cape Verde”.

Call centre staff use the new pension freedoms as a hook to speak to potential investors.

The Resort Group told the BBC both First Review and Lifestyle Connections had stopped taking new business on 30 June.

The Pension Advisory Service says: “You should be very wary of anybody who approaches you regarding a free pension review because at the end of the day they’re there to make money and you need to be really clear before you accept any offer from them.”

A spokesperson says: “We are grateful to Panorama” and “are investigating as a matter of urgency. All investments with the Resort Group PLC are safe and all our investors have received all payments due.”

According to the BBC, pension transfers into the Resort Group must be overseen by a financial adviser.

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Comments

There are 29 comments at the moment, we would love to hear your opinion too.

  1. I reported them to the FCA in 2014. Not that it did any use.

  2. How many news stories like this will it take before the penny drops???
    If something is promoted as being free then people need to ask themselves the very simple question, namely why is this free? Is it because it has no value ,therefore simply a throwaway or is it because it is intended to lead into something else i.e a promotion or marketing of something else?
    In this instance why would anybody offer a free pension review UNLESS there was a business model behind it with costs AND potential value to the firm offering the review? You don’t need to be a rocket scientist to work out that by meeting a financial services firm for a ” free pension review” will inevitably have more below the surface–in this case a sales pitch to invest in Cape Verde.
    If of course a firm does offer a genuine free pension review service with no strings attached then good luck to them–they will not be in business for very long!
    Unfortunately these horror stories are the ones that make the news headlines,rather than the potential thousands of good news stories about people who get real value from engaging and working with Independent Financial Advisers.

    • this is fairly short sited, we offer a free pension review, however if advice is taken then of course there are fees, we run a very stressful model this way.
      if a customer decides not to take our advice we foot the bill. we are DA and have a number of ifa that work for us.

  3. The crux of this story is not the story really but what is the FCA doing? Why had it not acted BEFORE people lose money? I seem to recall it was and is a criminal offence to be offering financial advice without being regulated – has anyone ever been prosecuted under the law? Likewise I too have reported many such entities to the FCA at first opportunity. If the FCA did act immediate;y – it could be nice and simple – hello – you appear to be acting illegally in offering financial guidance upon regulated financial products. Unless you can prove you are not within seven days or are regulated or desist from this activity and remove all websites etc immediately you and your staff will all be prosecuted and fines applied’. The onus of proof should lie with them not the FCA several years later and many (stupid) victims millions down….

  4. It’s only an offence for an unregulated adviser to flog regulated investments. There’s nothing to stop them flogging as much unregulated junk as they want. Also, there appear to be no effective controls to stop regulated advisers flogging unregulated junk or even to ensure that they have in place relevant PII cover to do so. Thus, when the complaints start rolling in, they swiftly go to the wall and dump their liabilities on the rest of us by way of the FSCS. Only in cases where the principals have made an exceptionally poor job of their application for reauthorisation does the FCA prevent them from phoenixing into a new business entity. How, after 30 years of regulation and a bigger budget than ever, can it still be so incredibly useless at identifying and putting a stop to poor practices? It really does beggar belief. And just what has been achieved by re-badging the FSA and changing a few faces at the top? Does anyone know?

  5. Whistleblowing should put an immediate stop to these operations but, in my experience, the FCA does nothing until after the event. As it is a criminal offence it should be passed to the police or SFO immediately and the individuals made to account for their activities rather than left to carry on…
    Perhaps the FCA staff should be held accountable to the same extent that advisers are – i.e. personally liable if you don’t report in good time.

  6. Perhaps regulation is required to slam the door shut by legislating that you can’t call people to discuss regulated products unless you are personal regulated or work for a regulated business.

    Not that this would stop it, but at least there is comeback… otherwise, it remains a grey area.

    Failing that, I’ll await the next call which opens by asking me ‘would it be fair to say that earning 12% a year on your pension would be a good thing’. I’ve received 2 historically and whilst it’s easy for us to say ‘anyone should know it’s a con’ unfortunately it’s a numbers game and sufficient numbers of people can be convinced it isn’t to justify the business model.

    Who could say no to a low risk, guaranteed, 12% p/a investment?

  7. Philip’s post is correct in stating -The crux of this story is not the story really but what is the FCA doing? They are not interested because they do not understand the intricacies of small business fraud. In our area, we have an unregulated character who masquerades as a financial adviser and sells SIPPs to non sophisticated investors. Storage pods in the UK, Green oil in Australia and Brazil, and new hotels in the West indies. People get taken in by the promises of large returns. Its happening all over and the FCA do nothing about it.

  8. Bethell Codrington 12th July 2016 at 5:30 pm

    “The Resort Group told the BBC both First Review and Lifestyle Connections had stopped taking new business on 30 June”. Oops we have ben caught, shut this one down and open up another firm.
    With “self certification” of pension funds (no checking on schemes before HMRC registration – which is sold as HMRC approval – and commissions on underlying unregulated investments of up to 30-40% on storage pods etc you can see the attraction for the scammers. Knowing that even after they have been reported to FCA it is a coupe of years before anyone does any investigation, and the chances of being prosecuted are minimal, this sorry saga will continue.
    Perhaps the authorities should be more honest with the public and admit that no pension fund established after April 2006 is approved, and half of them are not even regulated. The statement should read:
    “HMRC cannot guarantee that these Pension Schemes are legitimate, it is your responsibility to find out if they are a scam or not.”

  9. In May this year came across this same firm trying to fleece the son of one of our clients out of £110,000 from his defined benefit pension schemes. They transfer them to a SIPP based in Malta under the QROPS rules which was alarming to me as the guy lives in the UK and has no plans to leave. Fortunately we managed to close the door and cancel the transfers before it all went pear-shaped but it is somewhat disheartening to learn this organisation was reported to the regulator two years ago and they are still at it. Having fully reviewed the documentation issued to our client, it appears there are numerous organisations all tied up in this “scam”, some based in Malta, some in the UK and some god knows where. I checked the FCA website and one firm is authorised but there is a warning about their pension transfer permissions being removed and a past business review having been instructed. I reported the problem to the FCA and got a reply confirming a firm (First Pension Review Services) was not authorised but nothing else has happened since then. Unfortunately there are far too many of these organisations bending and flaunting the rules and they clearly only have one thing on their agenda and it sure isn’t TCF. More like WTF can they make out of this before disappearing into the sunset. It is surely not right that the general public should be at risk from such organisations behaving with complete contempt to the rules and regulations (which all good adviser firms try to follow to the letter) when the regulator with all its vast resources and its purposes of maintaining confidence cannot deal with such organisations in a timely manner. This is putting clients money at unnecessary risk and if any adviser firm did this the fine would be extreme. We have seen it when banks have done this and failed to segregate client money properly. They were issued with multi- million pound fines even when not a penny was lost.

  10. Oh my God, I had that conman that featured on the program last night round my house around one year ago. He was trying to get me to transfer all of my pension to do the same Cape Verde resort. He tried to get me to set up a limited company there and then he even had pre-populated forms just for me to sign. Thankfully I I smelt a rat and effectively put a stop to the meeting and told him not to contact me again. Unfortunately it looks like other peoplehave been caught.

  11. Any mention of Malta should ring alarm bells.

    Also no such thing as a free lunch.

  12. However much you try and legislate against these firms, they will always find an angle to avoid them. Now this sounds harsh and I suppose cruel, but the only way to protect regulated financial advisers from having to fund this fraud, is by completely excluding all non regulated investments from the FSCS. In my experience the only reason most people go ahead with these types of schemes is the promise of double digit returns, in other words greed. If the public are so concerned about the risks, then seeking advise from a regulated adviser before commiting themselves, would shut the door on this straight away. But despite all the warnings, do people take any notice of this – No.

  13. I wouldnt have thought that the FCA have any juristiction here at all. Nothing is regulated and withn thier perimiter. Its a criminal matter (if it can be proven a crime has taken place), and I wouldnt have thought the police have the time or inclination to deal with it anyway.

  14. Free doesn’t equal bad. Unfortunately the general public do not highly value financial advice, hence a lure of “free” is often needed. A £500 review wouldn’t probably work after all! It is up to us, as the regulated individuals to be moral, ethical, diligent and trustworthy. To give a free and genuine review, if that is what is promoted. There are a multitude of business models out there and plenty of advisers NOT giving away a free review, but equally encouraging actions that then incur further fees to the client. MAS failed to inform the masses and there is an ongoing issue of the general population not entirely trusting qualified people. The FCA need to do more to rid society of unscrupulous “advisers” and at the same time, promote the IFA sector. I’ll continue to initially work for free, educate as many people as I can and charge a fee where people can recognise I will add value if they continue a relationship.

  15. So they stopped taking new business at the end of June? I imagine that they were back on July 1st under a different name. It’s dead simple to end this – ban unregulated investments from being used in SIPPs. Lets face it, most unregulated investments have either gone belly up or are about to and caveat emptor simply doesn’t work in financial services.

    • They came back on the 29th June as pension connect, tried to con me out of my £400,000 defined benefits pension pot with The Cape Verde ‘scam’. 🙂 last year, funny thing is they contacted me again yesterday to invest at15% yield returns guaranteed for 2 years

  16. Something to ponder,

  17. First review and lifestyle connections is now known as ‘pension connect ltd’ they are doing the exact same thing they were exposed to on panorama! Free review my ass! They just want your money to invest in some kind of hotel in cape Verdi! They will try any approach to get your money. I used to work for these and it’s not a nice company to work for!

  18. Pension Connect say “Pension Connect do not provide regulated financial advice and are not regulated or authorised by the Financial Conduct Authority (FCA) or covered under the Financial Ombudsman Service or Financial Services Compensation Scheme. As part of this process we will introduce you to a regulated financial adviser who will assess the suitability of your existing pensions and provide you with financial advice before any decisions are made on your financial future”. So who is the Regulated Financial Adviser then ? Surely it is they who need to have a conversation with the FCA and quickly if Cape Verde Hotels are where people’s Pensions will end up doubtless ultimately worth a balloon and a fish.

    • I’ve also just spoken to a rep from Pensions Connect tonight, went through my pensions details and set up another appointment for a IFA to visit and advise on moving my money from a defined benefits pension into a SIPP. At the end of the the appointment after signing forms for the IFA to visit, she mentioned the Resort Group and a surefire investment in Cape Verde, minimum sum of £10,000 with guaranteed 15% yield the 1st 2 years. I haven’t signed anything for this but have arranged a 2nd appointment but on the back of what I have read will cancel.

  19. Pension Connect are using a telemarketer called Organic Wealth (Organic Leads Ltd). The regional manager of Pension Connect was regional manager of First Review. He also had separate company I Dreams pushing Cape Verde via First review.

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