You are here: Home - News -

FOS rules poor advice in raft of new Harlequin claims

by: Scott Sinclair
  • 10/04/2015
  • 0
FOS rules poor advice in raft of new Harlequin claims
The Financial Ombudsman Service (FOS) has ruled in favour of four complainants who separately claimed they were given unsuitable advice to transfer their personal pensions to new plans permitting investment in overseas property.

In each case, the Ombudsman has ordered the advisory businesses involved – named as Regency Financial Resources, Kingswood Financial Advisors and CIB Life & Pensions – to compensate the clients who ultimately invested in unregulated overseas property scheme Harlequin.

One case involved a presentation given by an IFA at a ‘money club’ and a deal eventually transacted on an execution-only basis. But it is set to cost the firm £45,000 in compensation.

The four latest results, each dated in 2015 and involving transfers to self-invested personal pensions (SIPPs), mean the FOS has now ruled in favour of the client in each of the 10 cases it has published related to investments in Harlequin.

The unregulated investment scheme worked by taking deposits from mainly UK pension investors to build off-plan properties in the Caribbean, which could then be sold at a profit on completion or used to generate a rental income from holidaymakers. But out of a scheduled 6,000 properties, it is understood about 300 have been built.

Some 85% of those who invested a total of about £400m in Harlequin did so on the recommendation of a financial adviser, according to law firm Regulatory Legal, which acts on behalf of around 2,000 investors in the scheme.

In February, the Financial Services Compensation Scheme (FSCS) announced it would compensate SIPP claimants for losses in the value of their investments in three schemes, including Harlequin Hotels and Resorts.

It said this was in addition to compensating for lost pension growth and charges taken from their SIPPs.

 

There are 0 Comment(s)

You may also be interested in