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Unregulated care home scheme with 10% ‘assured’ returns draws adviser concern

IFAs sceptical over company offering double digit ‘assured’ returns on investments in an autism respite and training facility

Risk - thumbnailAdvisers have hit out at a fund group offering 10 per cent “assured” returns on unregulated investments in care-home rooms.

The “socially responsible” investment has been marketed to advisers by St Camillus Care Group Ltd and assures double-digit returns for 10 years. The investor also has an assured buyback after 10 years at 110 per cent of the original price of the room.

Investments start at £49,950 for a room at an autism respite and training facility for young adults in Blackpool.

St Camillus lists a further advantage of the investment as its being “tax efficient”.

“[This is] a secure and proven investment opportunity from the trusted name in investment which offers an excellent alternative to UK buy-to-let investment by generating competitive returns over the medium and long term,” the marketing material sent to IFAs and seen by Money Marketing reads.

Signpost Financial Planning director Nigel McTear says: “I have that down as dodgy…. I’ve not seen it up close and it may be the best thing since sliced bread but I would be very cautious. Really, I wouldn’t want to touch it with a bargepole.”

McTear says the scheme reminds him of another that allowed investors to buy shares in luxury London hotel rooms that subsequently failed.

“That one ended in tears and I think this one might go the same way.”

Wingate Financial Planning director Alistair Cunningham says: “I can’t fathom how they can get a 10 per cent return and 110 per cent buyback, but needless to say I wouldn’t touch it.”

The FCA has previously warned firms against offering “guaranteed” returns on investment.

A section of St Camillus’ mailing seen by Money Marketing

However, Andrew Pritchard, managing director of Success Investment Group, an introducer that works with St Camillus, says the firm has not promised “guarantees” but “assured” payments because investors take on leasehold interests and sub-lease as landlords.

The list of contacts the material had been sent to was not primarily directed at advisers, he adds, only those who opted in, and the company had already run a similar scheme successfully elsewhere in the country.

Pritchard says: “The product itself is fantastic. It’s been active for a few months and we have client testimonial that it works really, really well.”

St Camillus declined to comment.

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Comments

There are 10 comments at the moment, we would love to hear your opinion too.

  1. Sounds remarkably similar to that Gravity Childcare investment that was on Radio 4’s You and Yours the other day.

    “It’s been active for a few months and we have client testimonial that it works really, really well.”

    I bet they do. When an investment promotes itself on the basis that it has great testimonials from clients who have not yet had their full return, run a mile.

    Store First had great testimonials from happy investors who were getting their “guaranteed” 8% every year as promised… failing to realise that anyone can take £100,000 off you and give you £8,000 back the next year, and even the year after that. It’s what’s left when you want to cash in that matters.

  2. Success Investment Group, an “introducer”

    First accounts late as of today and first annual return so late companies hosue began striking the company off.

    Oh Lordy. It never stops.

  3. Richard Anderson 5th July 2017 at 12:35 pm

    I’m staggered by this ! Is this not a form of ‘Collective Investment Scheme’? Is it being marketed by a regulated individual or entity – doesn’t seem so. The article says that the scheme is being offered by ‘the trusted name in investment’. On reading all of this I tried to find out just who this ‘trusted name in investment’ is, and it turns out to be a company formed in 2015 and which had a net worth of only £4k (according to http://www.companycheck.co.uk). The company behind the Blackpool development was only formed in April 2017. Where are the FCA and the Advertising Standards Authority??

    I have nothing against anybody developing a business idea, but do it at your own expense / risk. I’m afraid it looks like a host of other schemes in the past that have failed, with investors then claiming from FSCS.

  4. This item needs a wider audience so that the private individuals who may be lured and charmed, at least have the benefit of balance.

  5. Paolo Buco nel Terreno 5th July 2017 at 4:30 pm

    One word……Connaught!!

  6. Been trading for only 2 years and website still not working. One Director just liquidated a pub owing over 1/4 million. Interestingly, a firm of financial advisers is the major creditor of his bust pub. I wonder if they have some kind of vested interest in the new venture……

  7. Nicholas Pleasure 5th July 2017 at 8:22 pm

    There’s no problem with investments such as these and people should be allowed to invest in what they like, however stupid. However, it must be the case that there is no FSCS cover for such investments. The FCA could end this tomorrow by making IFA’s personally liable for unregulated investment advice.

  8. I suspect investors will sooner or later reflect that it “suc”s because it’s “cess”.

  9. Another investment scam/ponzi scheme. Shut them down before idiotic “advisers” recommend them to clients via SIPPs, or clients invest directly and lose money. They won’t be around before the 10 year anniversary.

  10. I hope Paul Lewis has been reading this article and the comments around those involved!

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