Investment Risk & Protection Archives - Page 2 of 2

Online Fraud – Mystery Offshore Bank that is not a Bank

2010: Shutter Island – Martin Scorsese

The internet provides huge advantages as we all know, however caution needs to be exercised. Today the Isle of Man’s Financial Supervision Commission has issued a warning that they are aware of a bogus website calling itself the “The Irish Nationwide Bank” (www.irishnationwidebank.com). DO NOT VISIT THIS BOGUS SITE as the FSC believe that one of the frauds being committed is identity theft. This is completely different from the completely legitimate Irish Nationwide (I.O.M) which can be found at http://www.iniom.com/.

It would appear that the bogus website exists to extract data from users or money, either way financial fraud. If you or anyone you know has had dealings with this bogus site, please contact your local police or contact the FSC enforcement division on +44 1624 689311 or by e-mail to fsc@gov.im.

Whilst most people do not have offshore bank accounts, this is a timely reminder that you need to act with caution when providing personal and financial information. I suggest checking with the relevant regulator or even me. If in any doubt, don’t provide the information. Financial crime is huge business and we all need to be vigilant to curtail and hopefully prevent its activity. Here is a good document that may help remind you about some basics of protecting yourself against financial fraud and identity theft which reminded me of the Leonardo DiCaprio film, “Shutter Island” which explores themes of stolen identity, delusion and missing people.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
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Online Fraud – Mystery Offshore Bank that is not a BankDominic2023-12-01T12:48:12+00:00

Grim Reality of Tall Tales

2005: Brothers Grimm – Terry Gilliam

Today is St Andrew’s day and a day of strikes across the country, which will be loaded with opinion depending on which side of the argument you sit and probably where your pension fund is currently held. I am not going to get into this one as I think I have already said enough about pensions.

On Monday I wrote a piece “Missed Target – The Cost Of Failure“. Well the price tag of this failure has now been released, with the FSCS drawing up a £58m hitlist. Whilst this is more akin to the shopping budget of some Premiership football teams, this is in fact the amount of money that the FSCS are now chasing from IFAs across the country that advised and arranged Keydata products. The lawyers for the FSCS (Herbert Smith) have taken the highly unusual and arguably unhelpful step of publishing the list, which will obviously not do the reputation of those firms any good. There are 437 firms listed, sharing the collective bill of £58m, nearly 100 of them have exposure of over £100,000 and I would be surprised if this didn’t turn into a list of firms going into administration, which would be a very sad turn of events, 15 of the companies are being chased for more than £500,000 with Chase de Vere having a massive £8.5m (nearly 14% of the total).

This is not good. It is rarely good when a business fails, but for those that do, all that will happen is that the outstanding bill is passed to the remaining IFA firms – who are not even on the list because we didn’t sell Keydata products. This increases operational costs considerably, reducing profitability and therefore sustainability. I’m sorry, but I just don’t understand the wisdom of the system that eventually simply punishes good practice by default. There’s also more to come of similar products (also rubbish) that it is reported has a list five times as long.

Sadly, the failure of Keydata is a failing at lots of levels, but above all, surely the structure of the industry is now very much shown for its failings. Research into products needs to be done not just by the IFA but also by the regulator and professional indemnity insurers and arguably industry journalists. If Enron taught us anything, it was to ask awkward questions when the supposed professionals (Arthur Andersen) were blinded by a story. Everyone knows that you shouldn’t judge a book by its cover, but of course in today’s culture it seems that this is harder to remember.

The link between those selling and buying Keydata products and the strikes today to my mind seems to be one of defying the sad, but real constraints of life, ultimately the price has to be paid. Any Government that takes a responsible approach to public finances, needs to research the commitments that it takes on. To do otherwise is like the IFAs that didn’t look under the bonnet of Keydata. Caught in time means that the pain is less than it would have been, but it was always going to hurt because expectations were wrong. We have myths and fairytales to remind us of truths. Beans are not magic.

DT

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Grim Reality of Tall TalesDominic2023-12-01T12:48:32+00:00

Missed Target – The Cost of Failure

1941: Target for Tonight

Sadly I have heard that yet another IFA firm has gone into administration, this time from my old stomping ground in Bath. This was primarily due to the compensation claims levied against them for selling clients Keydata products. The compensation claims seem to have run to £6m. The firm concerned (Target Financial Management) was part of a group called Target Chartered Accountants and both have now gone into administration according to the financial press.

This is a very sorry tale – in January this year all IFAs were invoiced for the collapse of Keydata by the FSA to the tune of about £93m. This levy was applied to all adviser firms, irrespective of whether they had advised/arranged/sold Keydata products. So even firms like us, that didn’t think Keydata were any good, were still caught up in the fiasco.

As we approach the deadline for RDR on 1st January 2013, IFAs will only be able to use the term “independent” if they genuinely consider the entire market of funds – duff ones and unregulated ones as well. The problem with this is that many IFAs are concerned that unless they sell these sort of products the regulator may withdraw their ability to use the term “independent”. I can see many old problems reappearing. Even today the regulator has expressed grave concerns about “Life Settlement Funds” which they describe as “toxic” and having no benefit to investors – again nothing we have ever sold to clients, but undoubtedly will have to pick up the bill for those that have.

So contrary to the view that a “competitor” going bust would surely be welcome news – it really isn’t. Fewer advisers means the public have less choice and probably higher costs. Yes when mistakes are made redress should be made, but investors must also share the responsibility when things don’t go well. Advisers should be better informed and clearly have the ability to investigate products more thoroughly, but investors must also ask questions. Clearly not enough questions were asked and few actually remembered the adage – if its too good to be true… it probably is.

The changes that are coming are likely to see more Accountant firms link up with IFA firms. This can work well, but as today’s news from Bath highlights, one mistake can take the entire house down. So this should serve as a warning to those firms considering joint-ventures or attempting to operate in a field of expertise which they lack. Better each to his/her own. So if your Accountant is considering this, or you are an Accountant, please may I encourage you to learn from the mistakes of others like TCA and not repeat them, because I’m fed up of paying for the mistakes of others, particularly when I thought that the investments were daft.

DT

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Missed Target – The Cost of FailureDominic2023-12-01T12:48:33+00:00