Expat investors worldwide lose £400 million in Oz Ponzi scheme

Published:  11 Nov at 6 PM
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The latest financial scandal to rock the expat world has resulted in massive losses due to the activities of commission-hungry rogue salesmen and greedy product providers.

Individual losses range between many hundreds of thousands to pension pots of £100,000 or less, with the staggering total making the collapse of the unregulated LMIM fund one of the most damaging since the 2008 crash. Warnings about the instability of the investment had been circulating online since 2009, when long delays in honouring redemption requests first set in.

LMIM’s popularity with unprincipled and mostly unqualified financial advisors haunting expat retirement hubs was due to its tempting up-front commissions of up to nine per cent and more. Greed prompted financial advice articles in expat publications recommending LMIM as ‘safe as houses’ right up until March 2013 when administrators were called in.

Expats across Hong Kong, Southeast Asia and Europe fell for the scam, and are currently battling to gain redress by fair means or foul. Unfortunately, there’s not much hope, as offshore regulators aren’t interested, home country authorities seem equally uninvolved and many of the illegally-working salesmen quickly disappeared after the bad news broke.

One retired couple living in Cyprus had arranged a QROPS pension transfer as recommended by an IFA just weeks before the LMIM collapse. They’ve lost their entire pension savings as a result even although they had requested a low-risk investment, and are devastated.

A Bangkok-based retiree, Peter Kells, told reporters he’s lost hundreds of thousands sterling, and is now being forced to sell his home. He added that he personally knows of many British expats now forced to live on their frozen pensions, having lost all their savings due to bad advice from rogue advisors.

The tragic tale serves as a warning to potential expat retirees planning to either take their pension pots as cash or invest in a QROPS pension transfer. It’s best not to trust any expat FAs unless their companies also have a presence in the UK and registration with the FCA
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