The Bogus ‘Financial Adviser’

There are some lessons to be gleaned from a recent sorry tale about Peter Holbrook who posed as a financial adviser. As often is the case, his focus was on fairly vulnerable people who were recently bereaved.

Holbrook was recently sentenced to prison for five years and three months, so in theory he will be held at his Majesty’s pleasure until he turns eighty. This is for conning seven people out of £850,000 which he used to fund his gambling habit.

The scam lasted 10 years and seems to have involved persuading his victims to allow him to handle Probate and reinvest the proceeds of the estate. His fraud involved forging letters from investment companies and writing Wills, for which I understand he had no formal qualifications or training.

Obviously being conned out of your own money can have devastating consequences. Families are left with a lack of resources in a world which we all know is quick to consume them. Not having enough is pressure enough, let alone having it stolen. Holbrook, like many people, formed a gambling habit. All gambling is based on the erroneous belief that the system can be beaten, the constant winning and losing inevitably leads to a deficit on the balance sheet, the pressure can in turn cause addicts to make decisions that they would be unlikely to make had they not gambled in the first place.

I don’t gamble and if I’m being candid, I don’t believe it’s a good idea. That said, I don’t really think there is anything particularly wrong with the occasional bet for a ‘bit of fun’, but in all honesty I can find more interesting things to do with money. However, in a culture in which many football teams (eight of the 20 [40%] current Premier League teams), or sports teams in general, are sponsored by gambling companies; clearly it will take the usual required will power to go against the crowd. Many have a story about ‘a win’ that they had, but few relay tales of loss.

Sadly, investing is often compared to gambling, which is a failure of education. The association is one of loss. Companies can and do go bust, regularly. If all your money is in one or very few shares, then frankly that is very like gambling (though you are holding real shares in the assets of those companies). Anyone holding shares in Enron will corroborate this. However proper investing is buying shares in a globally diversified portfolio of companies around the world. All working to improve products and services and design new ones. This is how commerce works. It isn’t a perfect system, but it has a long pedigree of success.

We all know that there are some difficult realities of life. We all will die, nobody escapes mortality. Money pays bills, it provides choice, but it needs looking after and getting one’s affairs in order is often tedious and other than peace of mind, provides little ‘buzz’; certainly you are unlikely to get a giddy feeling of anything resembling that of having won the lottery! Investing should be dull; it should be boring. If it isn’t, you are probably holding the wrong cards or playing the wrong game. Finding someone to trust in a world that seems deliberately set up to confuse with jargon and costs isn’t easy. There are only around 28,000 financial advisers in the whole of the UK. That’s not many for a population of 66million.

Nobody wants to be the victim of a fraud or scam, please check with those you care about that they have a bona fide adviser.