Watch out there’s an EMMIT about
No idea what I’m talking about? well, that’s probably a good thing. There have been a number of people that have been encouraged to move their work pension schemes into a SIPP (Self-Invested Personal Pension)… nothing necesarily wrong with that, unless they are still with the same employer and missing out on payments into it …entirely different story… anyhow these people have been encouraged to buy shares in Emmit PLC, a company admitted onto the AIM (Alternative Investment Market) run by the stock exchange (the market). It seems that some people have been offered “cash back” on their investment into Emmit plc, which is paid by a third party.
Needless to say (I hope) this is invariably the mark of a scam and one that the regulator (the FCA) is now aware of and warning investors about. Whilst not providing an outright “its a scam” statement, they naturally have serious concerns as invariably the sort of people that make these investments lack the experience to know that they are incredibly high risk and of course may be breaking pension rules, unwittingly incurring all sorts of penalties from HMRC. Sadly, experience of these things is that those caught up place all their pension fund or a very high proportion of it into a single share. AIM shares are generally considered much higher risk than those listed on the FTSE AllShare. By way of an example, I was writing to someone earlier this week who had shares in blue chip companies that you would know (ie. much lower risk and much safer). By the time I had outlined the value a paragraph earlier, the value had altered by £50… which ok is not a huge sum, but this was in the space of the time it took you to read this post, this far. At the time of writing the EMMIT PLC penny shares were worth 97.5p before being suspended… have a look.
You can read the FCA statement about the matter by clicking this link. Please note there is nothing to suggest that EMMIT PLC are doing any wrong or in any way involved, this is about the advice to move a pension and then buy AIM listed shares, which in this instance happens to be EMMIT PLC.
So if you come across anyone that has had a call from an adviser trying to arrange this ….who are you going to call? This is sadly not a rare problem. The jargon of the financial services industry does little to prevent some people being fooled into thinking that this is a “normal” investment. I spend a considerable amount of my time helping clients to avoid making such mistakes.