View more on these topics

FSA writes to Sipps requesting details of Harlequin investments

FSA Front Door 480

The FSA has written to Sipp operators requesting information on members who have invested in Harlequin Property.

The regulator has contacted Sipp firms asking whether any of their clients have holdings in the overseas property company. Any firm whose members have invested in Harlequin have been given five working days to provide the FSA with details of the investments.

It follows an alert issued by the regulator in January which said it had seen an increasing number of Sipps with underlying investments in overseas property purchased through Harlequin.

The alert said: “If a financial adviser recommends a Sipp knowing that the customer will sell current investments to invest in an overseas property, then just how suitable the overseas property investment is must form part of the advice given to the customer.”

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

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

  1. When this scheme eventually is closed down I hope the authorities ask some very searching questions like:

    1. Why was the FSA so slow to act when advisers were reporting their concerns nearly 6 years ago?

    2. Why is a firm like Harlequin allowed to publish detailed information on how you can own a property within a SIPP without holding authorisation.

    3. How can Harlequin promote property ownership through a SIPP at seminars and networking events without a single authorised individual been present.

    4. Why are Inland Revenue guidelines on this type of property ownership within a SIPP so vague and why did the Inland Revenue take no action when advisers report their concerns.

    5. It is clear that this company has a network of advisers who are willing to recommend this type of product. Surely there are some questions for these advisers to answer like it did they carry out the full due diligence of the scheme. I suspect that some advisers have simply recommended a sip to their clients and not make any detailed account of the final investment. If this is true then I hope those advisers are struck off as this is clearly not acting in the best interest of the client. The only reasons why an advisers would have got involved in this type of transaction is the high level of commission that was being paid to them.

    6. We also have to question whether it has now come time to regulate SIPP properly as I suspect this is only a tip of the iceberg in respects to inappropriate property investments.

    7. Surely what is needed is a tightening up of the authorised and regulated rules on who can provide information and advice on pensions. The Financial Servicing And Marketing Act 2000 was written when online activity is not as great as it is today and too many individuals are using journalistic principle as a way of promoting financial products. The amount of companies operating and providing information on pensions without authorisation online is truly scary and now this may result in a major financial loss to consumers. So surely it’s about time that the FSA and government took action to make sure the information provided online is only done so through authorised and regulated firms.

  2. Re point 7 above – there now seems to be more unregulated people approaching our clients (and me in fact) in respect of UCIS, pension unlocking and ‘cashbacks’ from pensions than ever before.

    I presume this is partly as a result of RDR but it was going on prior to that…..

    This again demonstrates the point that consumers do not know what questions to ask which might perhaps be down to the fact all they hear about is ‘poor performance’ and ‘rip off charges’. Perhaps main stream media need to focus on ‘the importance of authorisation’ and ‘what quality advice looks like’.

  3. I came across this investment years ago and warned off some colleagues who had been given the impression that as it was an unregulated investment they didnt need to worry about the advice given.

    The real question here is when is self investment not self investment. What if a client approaches an IFA for advice on setting up a SIPP but makes it clear at outset that they will be making the investment decisions themselves?

    Although I do agree that there are advisers that have been brought on board by companies like Harlequin to facilitate the SIPP after the client has been to an investment seminar hosted by the property company; and they really do need to be looking at the advice they gave at the time.

    But once again why has it taken so long for the FSA to notice something – surely this increases the argument that no one should have any redress to the FSCS where they invest in an unregulated investment whether they received advice or not.

  4. You may be interested in seeing the property ownership documents which relate to Harlequin.

    SIPP providers and IFA firms who carried this are finished. They didn’t check the background of the schemes. Blinded by commission.

    http://www.harlequininvestorgroup.co.uk

  5. I have had two diploma qualified advisers telling me how good this is and how much they are doing , putting this in SIPPs .

    I have pointed out the short comings in this scheme and neither of them will take it on board.

    It looks to me that passing exams still does not provide ethics and intelligence.

  6. @ Albion | 1 Mar 2013 4:05 pm

    Why would SIPP Providers be finished?

    Did they receive commission?

    Also – although a SIPP Provider should undertake a certain amount of due diligence isnt it the party who advised the client who is liable?

  7. @ Reaper. Exams do not always equate to ethics, correct.

    However, the fact that people have qualifications must make them more accountable to the public. When things go wrong, an unqualified individual can always claim the the issues were not fully understood. Not so for the qualified adviser- no chance to say ” I did not understand all of this either”.

    As for the SIPP providers, why is it some allowed this and some did not? That will be the discussion in the future!

  8. I was still like to know why the FSA was so slow to act as I reported this 6 years ago.

    The fact is the FSA and new FCA need to clamp down on any breaches of the Financial Services Marketing Act 2000 as it is clear that Harlequin and its agents have breached these regulations repeatedly over the last six years.

    As for the IFA’s and SIPP providers whether qualified or unqualified by my book have committed a cardinal sin of not acting in the best interest of the client. I personally believe that any adviser or SIPP organisation should face the maximum’s penalty as they were obviously concentrating so hard on their commissions rather than acting in the best interest of the client.

    I’m sorry to say that setting up a SIPP and allowing clients to make their own choices on their investment while still receiving high levels of commission is simply not acceptable particularly when those advisers had knowledge of where the money was going to be invested. Playing dumb is no defence

    We do not need advisers or SIPP providers like this in our industry!

  9. SFO have now added Harlequin to their website. Looking for investors to come forward-

    http://www.sfo.gov.uk/our-work/our-cases/case-progress/harlequin-property.aspx

Leave a comment

Close

Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm

Email: customerservices@moneymarketing.com