As Martin wrote about this morning, the Financial Conduct Authority (FCA) has fined and banned two Surrey based IFAs and their company Bentley-Leek Financial Management due to a series of failed property investments worth over £35m
Investors were led to believe that their investments contained guaranteed returns (which they didn’t) and also failed to disclose certain conflicts of interest as both IFAs were also directors in the companies in which they were advising clients to invest.
It is now possible that claims for consumer compensation will fall upon the Financial Services Compensation Scheme (FSCS) which is funded by levies against those IFAs who did not advise their clients to invest in such nonsense arrangements.
It prompts in our view a series of warnings that we think are pertinent;
* Don’t invest in any speculative investment if you cannot afford to suffer losses (ensure your finances are robust enough so that you have capacity for loss);
* Your adviser should be able to explain the advantages and disadvantages of any investment they recommend (and place equal emphasis on the downside or upside of any investment outcome);
* If you are offered a “guarantee” ensure your adviser can explain how such a guarantee is provided. If there are counterparts involved in the guarantee how safe are the counterparts?;
* And of course if something sounds too good to be true then remember it probably is!
Trust between an investor and the adviser is vitally important.
Events like this from Bentley-Leek Financial Management do nothing to enhance consumer confidence. Shameful!!
