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FOS dismisses adviser’s attempt to blame introducer for Harlequin losses


The Financial Ombudsman Service has upheld three complaints relating to Harlequin investments against adviser Allan McRoberts despite him blaming an unregulated agent for lost funds.

The clients were referred to McRoberts, who was trading as AM Wealth Management, by an unregulated agent for Harlequin.

The Harlequin group of companies marketed and built overseas luxury property developments and is under investigation by the Serious Fraud Office.

In each of the three cases, a disclaimer was signed stating that AM Wealth Management would only set up the Sipp and would not be involved in the advice or recommendation related to the property purchase.

The three clients paid their deposits for the properties through their Sipps in 2011. To date the investment properties have not been built and the FOS says it is likely the clients have lost the original investment.

The clients complained to AM Wealth Management in 2015 but the advice firm said it was not responsible for the decision to invest in Harlequin. It said the unregulated adviser should be held responsible as they provided the advice.

However, in one of the three final decision notices, ombudsman Benjamin Taylor says if the advice from AM Wealth Management was suitable the client would not have invested.

Taylor says: “I understand that AM feels it has been made a scapegoat and that the agent has walked away from this complaint without any liability whatsoever. The comparison between AM and the agent though isn’t a fair one.”

He adds: “The agent isn’t a regulated adviser. We have no jurisdiction over it. It is hugely significant that AM is. It brings a privilege to advise on pension transfers and gives responsibilities, duties and protections towards clients which an unregulated adviser doesn’t have. AM had a regulated duty to give suitable advice but didn’t.

“The argument that [the client] would have simply gone elsewhere and still have invested is misplaced. I don’t accept that Mr G would either have still invested, or gone to a different adviser for a different answer. If AM had given suitable advice it wouldn’t be dealing with this complaint.”

For each of the three clients AM Wealth Management must pay compensation based on calculations including finding the notional transfer value of the previous pension plan if it had not been transferred to the Sipp, paying a commercial value to buy the complainant’s share in the Harlequin property, and finding the transfer value of the Sipp at the date of the Fos decision.

It must also pay five years’ worth of future fees owed by the complainants to the Sipps and pay each of the clients £300 for trouble and upset caused.



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There are 8 comments at the moment, we would love to hear your opinion too.

  1. Mr Taylor hit the nail on the head when he quoted this statement- “It brings a privilege to advise on pension transfers and gives responsibilities, duties and protections towards clients ”
    A large number of unregulated investments in SIPPs have been recommended by unregulated individuals who unfortunately require the assistance of a regulated adviser to place them.
    If your daft enough to get involved in this then you should not be surprised of the consequences.

  2. Reckless connection by the adviser…. shows how ‘you’ can’t just walk away form the scene. What if a blank SIPP had been set-up to accumulate the funds from the existing various pensions and then the organising ‘adviser’ had nothing to do with the client signing the Harlequin investment paperwork…. and/or would the client be able to pursue the SIPP administrator for ‘allowing’ him to pursue a stupid investment in offshore, offplan property speculation…?

    The adviser was reckless and is paying the price but where or where is the client’s responsibility for being an idiot in all these things? And – where will the FOS’ capacity for ruling against an adviser stop. Let me imagine a scenario… South East property bubble collapse, prices down 50% so all the Buy To Let investors pursue complaints against the mortgage brokers (and the lending banks if direct) for allowing them to borrow the money when clearly it was outside of their risk criteria and capacity for loss…. This is the fear though – there is no final line…..

    • It is not just a buy to let property purchase that is unregulated. In most cases the mortgage is not either. So the first line of defence on such a complaint is likely to be an argument over FOS jurisdiction.

  3. “Mr G has agreed for the SIPP to pay the remainder of the purchase price under that contract … if the property is completed, Harlequin could require those payments to be made. I think it’s unlikely that the property will be completed … if the business takes over the contract from the SIPP trustees then it may be liable for the remaining amount of the purchase price.”

    I wonder if we’ll see a similar approach to other highly illiquid property investments?

  4. So the key is that FOS can not touch the introducer.

  5. So it’s the customer’s ‘money’ but our ‘decision’ as to what they should do then?! Kind of what we have argued all along with the whole insistent client situation… It ain’t gonna happen! ‘It’s not arrogance that prevents me from carrying out your wishes sir/madam, it’s just that my family assets are also at stake. Sorry and all that but there you go!’

  6. Is it me????? What bit of the title of SIPP does the FoS not actually understand?

  7. Robert Milligan 26th July 2017 at 4:48 pm

    In this case the FOS is completely justified in its Adjudication, The FCA & the FOS can “Only” regulate those of us who have voluntarily agreed to be regulated, You know the Rules, I have dealt with several complaints on behalf of clients when the Advice firm has endeavoured to Hide and I mean Hide behind the Introducer said this and that, Rubbish, if you as a regulated adviser get involved with Advice from which you know the client is receiving advice which should not be being given, then you your self should retire from being regulated.

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