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 advisers 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 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. In 2017, the Financial Services Compensation Scheme (FSCS) decided to treat these as UCIS (Unregulated Collective Investment Schemes), meaning that 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.