Crackdown on dodgy expat financial advisors gets serious

Published:  31 May at 6 PM
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Following several years of revelations concerning fraudulent and mis-sold financial advice in a number of expat destinations overseas, crackdowns by authorities are getting serious.

The recent news that Thailand’s Securities and Exchange Commission (SEC) is finally acting with police to investigate expat claims of fraud by illegally-working, unqualified IFAs caused a ripple across the country’s expat investor community. Dodgy IFAs in Bangkok, Pattaya, Phuket, Chiang Mai and other expat hangouts had been mis-selling investments paying massive commissions and offering very little in the way of security for many years until the LMIM scandal broke three years ago.

Massive losses amongst the expat community in Thailand are believed to total in the millions, as IFAs were pushing clients’ money into the now notorious Ponzi scheme up until a few weeks before it was closed down. Last-minute commissions paid to the unlicensed IFAs concerned were as high as 15 per cent, and a good number of supposedly reputable advisors were revealed as no better than outright fraudsters fully aware of the coming crash.

In Thailand, a number of firms are being investigated by police, with trials pending. The Bangkok-based LM Thailand Investor Group, (LMTIG) founded by British expat Peter Kells and including some 60 duped investors, was instrumental in putting pressure on the Thai authorities to investigate. The majority of those scammed were retirees, with many losing their life savings.

The group also involved the British Ambassador after urging him to support their case in presentation to Britain’s Financial Conduct Agency and HM Revenue and Customs. Almost 3,000 of those who’d been persuaded to invest in the Ponzi scheme were British citizens, as were many of the illegally-operating IFAs, several of whom fled back to the UK shortly after the fund collapsed.

According to the LMITG, illegally-operating offshore Brit financial advisors had the full co-operation of Isle of Man and Guernsey-based bond providers, pension trustees and insurance giants’ offshore arms, all fully aware that the fund was unregulated, high-risk and doomed to fail. Warnings from concerned, legitimate overseas IFAs had been circulating online for several years, yet British investors in a number of jurisdictions lost total sums of around £140 million, £22 million of which was QROPS-related.
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