The Financial Conduct Authority (FCA) have imposed total fines of £855,000 on directors of Bentley Leek Financial Management, a firm of investment advisers in Guildford, Surrey.
Mark Bentley-Leek and Mustafa Dervish have also been banned by the FCA from holding any position at a financial firm.
They were found by the regulator to have lacked integrity and to have misled clients as investments they recommended were affected by the economic downturn.
Between 5th March 2004 and 23rd November 2010, Bentley-Leek and Dervish advised over 300 customers to invest more than £35m in property developments in the UK and overseas.
Despite the inherent riskiness of these investment schemes, the pair told some of their clients that their money and a 6%-18% return on the investment was guaranteed.
Some investors were told that returns of up to 50% could be expected.
They also failed to disclose to investors that they were directors and owners of some of the property development companies. This naturally created a massive conflict of interest.
It’s investment ‘advisers’ like these that give financial advice a bad name. Our profession is better off without them.
While it is good to see the FCA taking tough enforcement action against Mark Bentley-Leek and Mustafa Dervish, we would also like to know what has happened to the other advisers who were selling these property investments when working for Bentley Leek Financial Management.
We understand many of them remain approved to give financial advice via other regulated firms.
Always check the history of your financial adviser; you can see where they used to work by checking the Financial Services Register.
We also wait to see what impact the actions of these two shysters might have on our Financial Services Compensation Scheme (FSCS) levies in the future.
As no doubt some of these investment schemes were recommended within a Self Invested Personal Pension (SIPP), there is a chance that investors will become eligible for FSCS compensation, even though the investment schemes themselves appear to have been unregulated.
People like Bentley-Leek and Dervish give financial advisers a bad reputation. Thankfully, individuals like this are few and far between.
Unscrupulous financial advisers are an increasingly dying breed, as higher professional standards are implemented in the retail financial services sector and the lure of commission is removed from investment products.
When choosing a financial adviser, always do your homework and select an adviser who is professionally qualified, well established and has a clean regulatory track record.
Feel free to question the advice given by any adviser, particularly if they suggest an investment with high returns and low risks is in anyway possible.
