The Financial Ombudsman Service has upheld four complaints regarding Harlequin investments against advice firms since the beginning of the year.
The Harlequin group of companies marketed and built overseas luxury property developments, and is under investigation by the Serious Fraud Office.
In a decision against West Sussed-based IFA Regency Financial Resources, the FOS ruled the firm failed to consider the suitability of the investment when advising on a Sipp.
The firm, which is no longer authorised as of January according to the FCA register, advised the client to transfer £56,700 from three pension policies into a Sipp. The client was introduced to the Harlequin property investment by a third party, which introduced him to Regency to find a suitable Sipp provider.
The FOS has ordered Regency should pay the difference between the value of the Sipp and the value the pensions would have held had they not been transferred, plus £300 for distress and inconvenience.
The FOS has also upheld two decisions against Kingswood Financial Advisors.
Both relate to clients who invested their entire pension in Harlequin through a Sipp.
In both cases, the FOS found the firm failed to consider the suitability of the underlying investment. Kingswood must pay the difference between the value of the Sipp and the value the clients’ pensions would have held, plus £1,000 each.
The FOS also upheld a complaint against Kent-based advice firm C.I.B. Life & Pensions relating to a client who invested in Harlequin.
The client attended a presentation where C.I.B. and Harlequin were both speaking. She subsequently contacted C.I.B. expressing an interest in investing in Harlequin, and was sent a direct offer pack which explained the firm was not making any recommendations regarding suitability.
The client returned the relevant forms and invested £45,000 in Harlequin via a Sipp.
But the FOS found C.I.B incorrectly classified the customer as a professional client and did not give sufficient risk warnings about the investment.
It has ordered C.I.B to pay the difference between the value of the Sipp and the value the client’s existing pensions would have held, plus £300 for distress.
Last month, the FCA banned two former directors of advice firm TailorMade Independent, which advised over half of its clients to invest in overseas property operated by Harlequin. The firm advised 1,661 customers to invest over £110m in unregulated investments.