Carey Pensions UK LLP
In May 2016, the business of Douglas Baillie Limited, following a barrage of claims against it, was forced to close down. By the end of 2016, the Financial Services Compensation Scheme officially declared the business to be in default.
In the national press in 2010 and on the subject of transfers out from final salary defined benefit schemes, Douglas Baillie quoted that “the investment return needed to match the benefits being sacrificed – the critical yield – can be ambitious.” He went further, stating that the “comparison calculations are complex and very likely to be heavily stacked in favour of the employer.”
These words are somewhat hard to swallow given that in October 2013, their appointed representatives The Pension Specialists, were forced by the FCA into suspending their pension switching business. The company disclosed that the regulator was unhappy that clients’ full financial circumstances had not been thoroughly appraised before recommending pension switches. Subsequent Financial Ombudsman’s decisions gave more insight into just exactly why the regulator was so concerned.
The Pension Specialist had been accepting business from third party unregulated introducers based all over the UK and in particular, from the west coast of Scotland. Invariably, the advice was based on an “insistent client basis” and saw pension holders move perfectly safe and performing pension funds firstly into SIPPs and then to unregulated collective investment schemes (UCIS) that were simply dripping in commissions of as high as 55%.
The common theme was that all the investments promised much higher than normal returns and, in many cases,, the sweetener of a non-repayable upfront loan for the pension holder. Little mention was made of the 5% advice fee or the commission kickback that found its way back to Douglas Baillie. The Ombudsman decision was extremely critical quoting that they “think it is also relevant that Douglas Baillie was paid commission. But, that was only paid if the transfer went ahead. In my view, this is a conflict of interest. The starting assumption for a pension transfer was that it was unlikely to be in the client’s best interest. That was required by the rules at the time of the advice. The interests of Douglas Baillie were therefore at odds with the best interests of its client.”
Typical investments were all sorts of green energy schemes, foreign hotel rooms through the likes of Harlequin and The Resort Group , storage pods via Store First and green energy through Green Oil Plantations to name but a few. Baillie even had links to the Infamous Capita Oak scam that saw the launch of a Serious Fraud Office investigation commence in May 2017.
It is hardly surprising that the level of complaints escalated firstly though the Ombudsman and now through the FSCS. Some estimates put the number of transfers managed by Douglas Bailie into SIPPs as likely close to 9000. Worryingly, and in an unusual step, the FCA have blocked the Insolvency Practitioners right to sell Baillie’s client book. This, along with our extensive research and discussions with unregulated introducers to Douglas Baillie, leads us to believe that the real number could be close to double that figure. Based on an average transfer value of say just £40,000 this could equate to an astonishing figure of in excess of £700 million.
If you have been referred to Douglas Baillie Ltd or the Pension Specialists by your financial advisor, mortgage broker or any other unregulated introducer and transferred your pension into a SIPP and have lost money, Beat the Banks are here to help. To find out more, simply complete our enquiry form or call our expert team on01382 200474.
Harlequin Hotels and ResortsHarlequin is one of the very first unregulated pension investments and, without doubt, one of the most notorious. Research has shown it was widely sold through a combination of mortgage brokers and financial advisors desperate for income during the lean years following the financial crash of 2008. Unregulated agents were also very heavily involved.
The first of the Harlequin group of companies was formed back in 2004 by David Ames, a former photocopier salesman, who is currently charged by the Serious Fraud Office over three counts of fraud. As many as 6000 people were induced to part with their pensions and savings to invest in supposed off-plan luxury resorts in the Caribbean; the most famous of which was Buccament Bay in St Vincent. Harlequin, with the promise of incredible returns and hotel rooms that investors could actually use too, pulled in close to £400 million pounds. In 2017, the Financial Services Compensation Scheme (FSCS) decided to treat these as UCIS (Unregulated Collective Investment Schemes) meaning they finally qualified for investor protection.
Sales commissions were typically 15% and all paid at the front end and based on the anticipated total investment. An initial down payment of £50,000 on a planned investment of £200,000 earning a whopping £35,000 in pure commission.
Embarrassingly, many celebrities found themselves promoting and endorsing Harlequin, including the likes of footballer Andy Townsend, TV property expert Phil Spencer and even Liverpool F.C. Currently more than £100 million has been paid in Harlequin compensation by the FSCS and they have now given the fund an official value of zero.
The Resort Group (TRG)The Resort Group, or TRG, was first established back in 2007 by Rob Jarrett, a former financial advisor with the Prudential. Headquartered in Gibraltar, and therefore out-with the scope of the UK regulators, they have now completed a number of luxury hotels in Cape Verde. They boast of partnerships with the likes of the Melia Hotels International and Hilton Worldwide. It is fair to say that on occasion, they have hit the headlines – and for all the wrong reasons.
Following the collapse of the UK financial market in 2008, TRG urgently needed to find a sustainable model to raise development funding. Financial advisors in the UK were targeted to sell TRG investments to their clients via the transfer of perfectly safe and performing pensions into SIPPs with the promise of mind blowing returns of up to 10%. It is a pity that these financial advisors and mortgage brokers were not decent enough to disclose the huge level of commission this shameful advice earned them.
Unfortunately, investors continue to be hit by less than promised returns and illiquid investments that cannot be encased. Finally, in August 2017, the FCA, through its unauthorised business team, started issuing questionnaires to The Resort Group’s Cape Verde investors.
Operated and owned by Toby Whittaker and part of the Group First network of companies, Store First was all about self-storage warehouses all up and down the country. Quentin Wilson, ex-frontman of Top Gear, famously quoted in one of their promotional videos that Store First was, a “remarkable investment, with 20 centres and plans for more.” In reality, the actual number was significantly less. The promised returns were of course highly attractive too. A tasty and “guaranteed” 8% in the first two years and then rising to 10% in the next two years and then 12% in years five and six. A staggering potential return of 85% in just six years. Investing was easy too, you could part with as little as £3750 for a small pod up to £30,000 for one promising a very appetising £,400 return in just the first two years alone.In reality it was all a scam and unfortunately in June 2016, the UK government filed for a petition seeking the wind up of Store First. The story of how the investment was sold is just as remarkable as the promised returns. Master agents are believed to have received commission payments of up to 55% of the amount invested and their route to market was varied. The most infamous was the Capita Oak Pension Scheme and the Henley Retirement Benefit Scheme.
Green Oil PlantationsFormed in March 2010, Green Oil Plantations Ltd and Green Oil Plantations (Australia) Ltd entered administration just a little over three years later. Their Statement of Affairs made grim reading. Investors were staring at a financial black hole of over £25 million. In total, £24.4 million had been raised from 1131 investors with 19% being via SIPPs and endorsed by a number of SIPP providers such as Lifetime SIPP and Brooklands Trustees (deeper link to both at end of script).
This unregulated, illiquid and high-risk investment was set up to establish a Millettia tree plantation in Australia. The trees would be harvested after two years and sold primarily as biofuel and at a lower end, livestock feed and fertiliser. Aggressive promises on income revenue proved wide of the mark and within the first year alleged “operational issues” with Queensland-based plantation’s first harvest left the connected companies facing significant cash flow difficulties.
Unsurprisingly, the administrators raised concerns that the 100% owned Australian subsidiary, Green Oil Plantations Holdings Pty had seen fit to pass management of the plantation to Burman Bio Energy Pty – a company run by Neville Burman, a shareholder and former director of both of the Green Oil Plantations Limited UK companies.
Capita Oak Pension Scheme and Henley Retirement Benefit SchemeTranseuro Worldwide Holdings Ltd was operated by Mike Talbot, a close friend of Toby Whittaker, the owner of Store First. Whittaker and Talbot were fellow directors in Harley Scott Holdings which was formerly known as the Dylan Harvey Group and the holding company of Dylan Harvey Residential. The latter collapsed in 2009 with £6.5 million of off-plan deposits lost. Talbot and Whittaker were also co-directors in Store First Midlands Limited.
In an elaborate scam, in just over two years Store First owner Toby Whittaker paid commission of £33 million to Transeuro Worldwide Holdings Ltd. In turn the funds were used to fund two unregulated introducer businesses, namely Jackson Francis and Sycamore Crown. Both firms cold called the public offering pension advice with misleading guaranteed returns. Sadly, neither had the expertise or knowledge to offer advice.
Pension holders were offered SIPPs and pension schemes run by Imperial Trustee Services Ltd and Omni Trustees Ltd who were responsible for the Trustee and Administration services of two occupational pension schemes – namely Henley Retirement Benefit Scheme and Capita Oak Pension Scheme. Incredibly, a catalogue of lies, false promises and even forged documentation saw them transfer £39 million into SIPPs with £10 million going into Capita and £8 million into Henley. Incredibly and predictably, the only investment offered was storage pods via Store First Ltd.
Eventually, in May 2017, the Serious Fraud Office announced that it was investigating the Capita Oak Pension and the Henley Retirement Benefit Scheme, along with the SIPPs sold through Jackson Francis and Sycamore which invested in storage pods. It is estimated that over 1000 pension holders and investors lost a combined total of £120 million.