Has Your Adviser Ripped You Off?

Learn how a how duped client fought his way out of a contractual savings plan and got back all of his premiums returned.

“Forged signatures, missing documents, lawyers, financial regulators, non-disclosure agreements……lies, lies and more dam lies……”

Act One – The Set Up

We will open the story with John (not his real name of course) whom I met at an expat networking event. We chatted and I told him I was a financial adviser and we agreed to grab a coffee and see if there was something I could help him with.

After having a look at John’s financial picture it was definitely in his best interests to pay off his debts (credit cards and loans) and leave the investing for a year or two till he had a financial cushion behind him.

We kept in touch and would still grab a coffee now and again to catch up and to make sure his debt repayments were going according to plan.

John starting spending more time travelling abroad and we gradually lost touch until February 2015 when my phone rang and it was John

As I had not heard from him for a while I answered the phone eager to catch up and after the initial back and forth banter he uttered the magic words “ I met with XYZ Advisery company” and my heart sank…

“…paid in around 13,500 euros  and would get  back less than 2,000 euros with early encashment penalties.”.

“what did sign you up for?” I asked, I had that gut feeling he was in some kind of trouble.

He had gone in looking for a short term 3-5 year investment plan and XZY advisery had sold him  a 15 year plan from the ABC company with the words, “you can get your money back after 18 months in the worst case scenario”.

As you may know these plans are sold heavily to expats and have some pretty hefty early encashment charges. He had signed up in 2013 and paid in around 13,500 euros over the course of a couple of years and was shocked that would get back less than 2,000 euros if he had encashed it early.

He called me asking if I could help and to see what his options were.

As he was not my actual client there was not much initial help I could offer but I asked him about everything he had signed and I told him to ask the company to send him a copy of all his signed documents.

I remembered that the ABC company had in 2013 brought in the rule that all investment illustrations should be signed by the client.

This is where things got very interesting….

Act Two – The Confrontation

On receiving the documents he discovered that his signature had been forged not once not twice but 6 times including the investment illustration which would have shown him the early encashment penalties!

“We had a classic case of financial fraud”.

He immediately had me appointed as his adviser and I was able to contact ABC company myself and ask for copies of all the documents that they had been sent by XYZ Advisery company when the application was submitted. We then reached out to a local lawyer for an initial discussions to go over our options.

We called the XYZ Advisery company and asked for a full redemption of all premiums paid based on a fraudulent application.

Over the course of many weeks  we were given the brush off and told the advisor had left the company and we would need to have the signatures certified by a graphologist

We also approached the ABC investment company who informed us that we would need to take it up with the XYZ Advisery company.

It looked like we were getting nowhere.

We sat down and planned out our next course of action.

I contacted the financial regulatory bodies who XYZ Advisery company were supposedly regulated by but due to the cross border regulations no one could give me a definitive answer as to who was responsible and who we should report this issue to.

Again more dead ends.

The email exchanges continued over the course of many more months and it was obvious we were being lead around in circles.

We needed to up our game, with the help of the lawyer we drafted a letter asking for a meeting in the local office of XYZ Advisery and that we were considering “approaching the trade press” with our story.

“you won’t go to the press with this will you….?”

We got the meeting and after their head adviser had apologised profusely for all the mistakes we were assured that they would be liaising with ABC company and that all the premiums would be returned and we would soon be contacted by their head office.

The parting shot as we left was indeed memorable as he asked “you won’t be going to the press with this will you?”.  

All seemed to be resolved but as the days rolled by and then the weeks without so much as a phone call we knew something was amiss.

A year had gone by since i answered John’s call and he had now begun his honeymoon, a 3 month trip in South East Asia, so of course logistics were harder but he was like a dog with a bone.

Another phone call to the ABC head office left us shaking our heads. They knew nothing about the proposed redemption in full and had not been contacted by XYZ advisery……..

Act Three – The Resolution

At this point we decided to focus more attention on ABC company as they were always responsive to our requests and very open to discussion, unlike XYZ…

So  we pushed and pushed and e-mailed and e-mailed and……..SUCCESS!

ABC agreed to return the 13,500 euros of paid premiums after approximately 15 months of being lead down many dead ends.

“thou shalt not tell…”

It took another couple of months of toing and froing with XYZ Advisery but eventually John was also able to get his lawyer’s fees returned to him – after signing one of those pesky pieces of paper that “thou shalt not tell..”

Moral of the story – never give up!

If you are an expat and think you have been duped into a long term plan and this wasn’t what you wanted then request from the actual investment company (ABC, DEF, STU or whoever it may be) the below documents:

• The detailed plan guide about  investment vehicle.
• The terms and conditions of the investment vehicle (usually needs to be signed by policy holder).
• The product key facts of the investment vehicle (usually needs to be signed by policy holder).
• The plan illustration pre sale (indication of growth and value of plan for during the plan duration, ABC company has set a rule that it needs to be signed by the policy holder as of 2013).
• The application form.
• A copy of the application after it has been signed.

If you were not given any of the above to read through before signing or if any of the documents were altered after you had signed them then you may have the beginnings of a case to get your premiums returned.

If you or anyone you know has been badly sold one of these products please read on/share this story. I can’t promise you that you will have the same outcome but you will never know unless you try.

Contact Me Today for an initial informal chat to look at ways in which I might be able to assist you if you think you have been miss-sold one of these products.

About the author

Colin MacGregor is an independent financial advisor with over 10 years experience in the advisory sector and  has been based in Prague, Czech Republic since 2009.