Fraudulent investments?

M.Elliott · 22 May 2018 at 9:09AM

Great thank you very much for the advice, I will certainly post a redacted version here first.

Malthusian · 22 May 2018 at 9:19AM

Glen_Clark wrote: »

I suspect he would put it differently
Is there proof he said that?

It's pretty irrelevant. Onus is on the adviser to prove that the OP's parents were ultra-risk-seeking investors, with a substantial mainstream diversified portfolio, for whom a small proportion of their assets in unregulated ultra-high-risk bonds was an appropriate recommendation. The FOS will decide on the basis of what is "fair and reasonable" whether the investments were suitable.

It matters little whether the adviser described them as "100% safe" or as "100% asset-backed assured mumblemumble unregulated ultra-high-risk investments which will lose all your money". If they're inappropriate it hardly matters how he described them.

Despite not knowing the OP's parents and having no knowledge of what is in the adviser's files, I would be absolutely staggered if the FOS concluded these investments were suitable.

The OP has given us no reason to believe this will go anywhere near a courtroom.

Reaper · 22 May 2018 at 9:28AM

There's something very fishy about an adviser splitting an entire investment between just 2 companies, both of which just happen to decide to invest 100% of the money into an obvious con run by a known fraudster (link)
Your parents need to gather all the written evidence they have from their adviser as to what he was recommending and why. It carries more weight than any verbal statements made that may be denied.

M.Elliott · 22 May 2018 at 10:17AM

This complaint is in regards to advice given by financial adviser xxxx to ourselves Mr and xxx. In November 2015 on the advice of xxxxx we made an investment of a large sum of money to Helix Investment Management and in August 2016 , again on the advice of xxxx,we made a further investment of a large sum of money into Munio Capital ltd. We were told on numerous occasions by xxxxx during the dicussions leading up to us depositing money that these were sound investments, our money would be safe and nothing would go wrong. We were also assured that in the unlikely event that anything was to go wrong then 95% of our capital would be safe. At no time were we told of any risks associated with carrying out these investments.

We have now been made aware of serious problems within both companies, including fraud, and are now being told that we are unable to either get the returns that we were due or even more worrying, unable to get our capital back, this is despite being assured by xxxxx this was a safe investment. In hindsight and after extensive reading around both these companies it is now apparent that we were given poor and unsound advice from xxxx. Xxxx is FCA registered and is associated with xxxxxx, a regulated advice firm. However we were given recommendations to use non-regulated investments. As we are low risk, inexperienced investors that have put our entire life savings into these companies we now believe this advice was poor and has subsequently put our money at jeopardy.

The brochure supplied by Munio Capital states that it is suitable for certified high net indivduals, sophisticated investors or self-certified sohisticated investors. Clearly we do not fall into any of these cateogories. At present it appears that Munio capital now longer exists and no information can be found about them, their website has been removed and emails are getting returned. We have had absolutely no communication from Munio to update us with the court case that we have been told by xxxx is ongoing. The same goes for Helix Investment Management who were meant to update their investors at the beginning of May but as yet we are still waiting. We are wholey dis-satifisfied and unhappy with the advice given and the lack of communication received since these issues have came to light.

As per advice from the financial ombudsman we are informing xxxx Financial Services and xxxx that we are registering a formal complaint due to all mentioned above. We expect a final response within the 8 week time frame, detailing to us where are money is, when we can get it back and why we were advised to put our money in such unsound investments to begin with. If we are still not satisfied that this matter can be brought to a close with our money safely back to us we will be instructing the financial ombudsman to take action in order to recover our lost monetary funds.

Yours Sincerely

M.Elliott · 22 May 2018 at 10:20AM

This is my draft letter of formal complaint, any advise on how to make better welcome.

Yes Reaper, very fishy and just does not make sense. They have all the original documents he gave them in a folder safe thank goodness.

Malthusian · 22 May 2018 at 10:46AM

IMO it's spot on. The crucial elements of the complaint are 1) these were extremely high risk, unregulated investments 2) your parents did not have an attitude to risk that made high-risk unregulated investments suitable 3) even if they were suitable, these investments would only have been suitable as a small part of a balanced portfolio whereas they were advised to invest all their available capital. All three are in your complaint.

Did your parents ever complete a risk questionnaire or risk profiler and have it confirmed to them that they were "low risk / medium risk / cautious / balanced" investors or anything to that effect? It's not crucial, but it will make it absolutely clear that the investments were not suitable.

Remember that the schemes collapsing is not the complaint, the complaint is that they were unsuitable. The regulatory system doesn't compensate you for losing money in investments, but it does for bad advice.

Aegis · 22 May 2018 at 10:49AM

I'd be tempted to keep it much simpler, e.g.:

Dear XXX

We are writing to you to express our concerns and dissatisfaction with the advice we received in 2015 and 2016. Since those dates, we have become aware that our investments in Helix Investment Management and Munio Capital - two unregulated investment schemes - should only have been promoted to certain categories of individual, and we do not believe that we fell into such categories, making the advice itself wholly unsuitable.

Would you kindly treat this as a complaint about the suitability of these investments and advise us on how you propose to compensate us if your advice indeed proves to have been inappropriate.

Kind regards

Keeping it vague means they can't just respond to the letter section by section - instead they need to conduct a review of the case and provide their findings about the suitability of all the advice they gave around those investments. The more specific you make a complaint, the more specific the response can be.

Lungboy · 22 May 2018 at 11:23AM

I'd personally change "large sum of money" to absolute values, maybe even add % of overall portfolio to drive home just how important these investments were, but that's just me.

M.Elliott · 22 May 2018 at 11:25AM

Thank you Malthusian and Aegis, much appreciated feedback from you both and i will take on board advice to maybe simplify the letter. The more I think about the whole thingbthe more unbelievable it seems. This financial adviser is a well respected man around town, has been in business for many years and is a family friend. Why did he give them such poor advice? He knew their entire money would go to privilege wealth as that is documented on their forms and he gave them a print out about the advantages of privilege wealth. Why did he think this was a sound investment when a simple Google search shows how fraudulent they are and have been for years back. I can't understand it. Also it turns out he was in Panama on business a few months ago which is where privilege wealth have their base I believe, wonder why he needed to go there. The whole thing is strange with so many unanswered questions but he seemed like a nice man and the optimist in me finds it hard to believe he was wanting to cause them harm. I just wish my parents had spoken to me or one of my siblings before going through with this investment and got us to do some research. I'm sure they would have ran a mile from it then !!!55357;!!!56848;

eskbanker · 22 May 2018 at 11:32AM

The shorter form looks better to me but should you decide to proceed with the longer version then worth getting it proof-read or at least spell-checked, as phrases like "wholey dis-satifisfied" and "where are [our] money is" detract from the impact IMHO.

Fraudulent investments?

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