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Adviser wins £190k for clients mis-sold UCIS by deVere

by: Laura Miller
  • 05/02/2015
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Adviser wins £190k for clients mis-sold UCIS by deVere
An adviser has finally secured the return of £190,000 to his clients after a two-year battle over unsuitable advice with one of the world's largest IFAs.

Victor Sacks (pictured), IFA at Peterborough-based Ringrose Grimsley, helped the couple through the Financial Ombudsman Service (FOS) process after he took them on as clients in 2013 and realised they had been mis-sold a variety of high-risk investments by deVere UK.

But despite the FOS finding against deVere in July last year and ordering it to pay the couple the maximum redress of £150,000, the advice group has only settled with the couple this month.

In an email from the FOS to deVere seen by Professional Adviser, an associated title of Mortgage Solutions, dated 19 December 2014, the Ombudsman threatened to refer the matter to the Financial Conduct Authority to bring an enforcement case against the advice firm unless it paid up.

It eventually returned the couple’s full investment amount of £190,000 on 4 February. Sacks is now helping his clients pursue the firm for the £121 per month management fee that it took.

The couple were assessed by deVere in 2009 as having an attitude to risk of “cautious to realistic”.

But the multi-national advice firm invested the couple’s money almost entirely in risky unregulated collective investment schemes and funds only suitable for ‘qualified investors’, those deemed sophisticated enough to understand their complexity.

Four of the five funds deVere chose for the couple – which included EEA Life Settlements, two Brazilian teak funds, and a traded endowment fund – were suspended by September 2012.

deVere admitted in a letter to the couple in October that year that “the investments made in these funds were perhaps not fully appropriate for you”.

It agreed with the FOS adjudicator who later found that the portfolio was unsuitable, but failed to contact the Ombudsman any further until the service started chasing it to pay the compensation the couple had been awarded.

Sacks said he was “delighted” to see the case conclude.

“It proved my faith in the FCA and FOS, however, it does leave a bitter taste, when perceived big firms can still stand behind the advice that a cautious attitude to risk equals UCIS and dragging the case on for two years.

“My job now starts again with my client, to restore his faith in my industry.

“On the one hand, we wonder in amazement why people do not engage with advisers, or stare open mouthed as the government selects the Citizens Advice Bureaux to give pension guidance, yet as this case shows, all too often, we light the firework too close to our faces.”

deVere had not responded to a request for comment at the time of writing.

 

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