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Pensions Regulator steps in over ‘worrying’ £6m investment scheme

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The Pensions Regulator has stepped in to protect £5.8m of pension savings transferred into a scheme with risky investments which pays unregulated introducers up to 30 per cent commission.

Independent trustee firm Dalriada has been appointed to the London Quantum Retirement Benefit Scheme after TPR raised serious concerns.

It warned members’ funds were placed in risky, illiquid investments including car park spaces, Brazilian farm land and Cape Verde hotel rooms.

TPR found members were unaware of the high levels of risk and were not given appropriate documentation.

In addition, introducers – including cold callers – were being paid commission up to 30 per cent.

Dorrixo Alliance, the firm behind the scheme under the directorship of Stephen Alexander Ward and Anthony Salih, has been removed as trustee of the scheme.

Dorrixo took over the trusteeship in April 2014.

Since then member numbers rocketed from three to over 90. The firm was paid fees totalling £63,000 over six months despite the TPR saying there was “no evidence of what Dorrixo was paid for doing”.

There was a pipeline of around 600 potential new members on the verge of joining the scheme.

TPR director of case management Nicola Parish says: “The concerns we received about the scheme highlighted worrying factors regarding its governance.

“This case should act as a reminder to all savers, pension scheme trustees and administrators to remain alert to the dangers of transferring pension savings in order to access unrealistically high returns often associated with exotic sounding investment opportunities.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. It would appear that the same people are setting up these scams time and time again.
    It does not appear that the regulator can stop them just setting up yet another scam, and rely upon members of the public to tip them off.
    Is it not time we regulated Pension Trustees. Regrettably for London Quantum members, they are unlikely to see anything back once Dalriada have taken a few years worth of fees out of what is left.
    What tPR need to understand, is that this is sold to financially unaware people, who are told this is all UK HMRC approved, and shown official letters to back this up. How are they to know that a HMRC registration letter is NOT an approval? Stephen Ward uses his work for HMRC and Tolley’s Tax guide to give himself legitimacy.

  2. Julian Stevens 5th July 2016 at 2:25 pm

    How much of these losses will be borne by the regulated adviser community by way of the FSCS?

  3. Julian

    It’s an old occupational scheme that all these people were put into. How much of that do YOU think was FCA-regulated activity? Why do you think DWP had a stab at changing the law by bringing in section 48 of the Pension Schemes Act 2015 and article 53E of the RAO?

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