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Welcome

WELCOME

Warning - Sharks may be present

 21st March 06

LOCAL FINANCIAL ADVISERS IN COURT

 

The Costa del Sol Action Group CDSAG (www.costa-action.co.uk) was started by the popular Canine Behaviourist David the Dogman’ Klein See www.thedogman.net nearly five years ago.

 

 David Klein and his wife lost money due to the incompetence and mis-selling of his local financial adviser best trading platform south africa. David could not obtain any recompense or redress because the company had no professional indemnity and was not licensed or authorized by any official body in Spain such as the CNMV or DGS in Madrid.

 

From these relatively humble beginning the CDSAG has now grown to represent more than 800 families who have suffered similar losses totaling a staggering £87 Million Pounds Sterling.

 

All members of the Action Group are asked to pay 250 Euros as a one off payment. This money is used to pay out of pocket expenses of our lawyers and for Translations.

 

NO MEMBERS OF THE COMMITTEE TAKE OR CHARGE ANY MONEY FOR THE WORK THEY DO.

 

The lawyers acting for the CDSAG, initiated proceedings in  Spain's Supreme Criminal Court in Madrid culminating in a class action on behalf of selected aggrieved parties against certain financial advisers. The Comisíon Nacíonal del Mercado de Valores (CNMV) and the National Fraud Squad in Madrid estimate that the number of expatriates who have suffered at the hands of unscrupulous and unauthorized financial advisers could run as high as 17,000 foreigners in Spain.

The amount of paperwork produced for the court is awesome with reams of documents translated from the original English into Spanish for the court process.

 

The first named defendants have now appeared before the courts in Benidorm and Marbella to make their depositions and be interrogated by the Judge and lawyers acting for CDSAG on behalf of victims.

 

John Anstey Findlater OBE who sold the IPM FTSE-100 Fund, Sensible Options and Charterhouse Trust Credit Union amongstothers  have also appeared before the court in Benidorm on 11th April 2006 to testify against the allegations of misselling and not being licenced.

 

SEE ANDREW LINN

 

Colin McCready of Offshore Money Managers in Marbella, Christopher Labrow , formerly of Labrow International with McCready and now Chairman of the Gibraltar Association of Stockbrokers and Investment Managers.

 

Donald Nott of Henry Woods Investment Management  Marbella

 

Further information shortly

 

Whilst every effort is made to maintain the accuracy and reliability of the information regarding this web site,The Costa del Sol Action Group does not accept any responsibility for errors and omissions regarding the information published. We also cannot accept any responsibility for readers responding to items published and suggest that further professional advice and information is sought from bonifide and reliable sources.

 

Click here to view a warning direct from the British Embassy

 

WE EXPOSE FINCANCIAL ADVISORS  WHO HAVE  NO LICENCES,  QUALIFICATIONS & MISS  SELL.

WE INVITE COMMENTS FROM IFA'S WHICH WE SHALL GLADLY PUBLISH

WE EXPOSE PRODUCT PROVIDERS WHO WORKKNOWINGLY WITH

THOSE THAT MIS SELL .

WE INVITE COMMENTS FROM PRODUCT PROVIDERS WHICH WE SHALL GLADLY PUBLISH

WE EXPOSE  FINANCIAL SERVICES REGULATORS

WHO SEEM INADEQUATE IN THEIR PROTECTION OF THE PUBLIC         

   Membership 832 Families

LOSSES  OF OVER 80 MILLION POUNDS STERLING

 Contact us

David Klein  Tel (0034)  952883388  david@thedogman.net

David Bamford  Tel 0034 950523707

Gwilym Rhys-Jones Advisor & Investigating Journalist 

gwilymr-js"center"> Tel (0034) 951318277 

John Blainey Treasurer Tel (0034)  952883331 ext 016 ajcom@mercuryin.es

 Tel (0034) 951318277 

LAWYERS ACTING FOR THE GROUP

IURA Despacho Jurídico
Avenida Jesús Santos Rein
Urbanización Puebla Lucía
   Edificio Mirador, 1º 
29640 Fuengirola

 
Tel.: (0034) 952 477108/ 952 477112
Fax: (0034) 952 477116

How a dream can become a nightmare

An example of financial  "Mis-selling".  here in Spain

 

Ask most expatriates why they have chosen to retire in Spain and they will answer that it’s to leave the cold wet weather behind and to enjoy a new way of life – a more relaxed one.  Moving away from their home country helps them leave stress behind, be it work related, paying mortgages or raising a family.   They look forward to being able to take it easy, sleep in in the mornings and enjoy the sunshine and local food, wine and way of life.    

 

However, in order to continue living a stress-free life they need to know that they have enough money (pensions, savings, investments etc) to allow them to live comfortably and in the manner they are used to for the rest of their lives.  So once they have sorted out their new house most will visit a financial adviser for recommendations on how to ensure that their capital will see them through their retirement.    It’s common for retirees to face the dilemma of wanting to earn more than they can do from keeping money on deposit, but at the same time cannot afford to take risks with it.  Unfortunately some expats have been sold investments unsuitable for their risk profile, with the result that they lost capital they could not afford to lose.  Mr & Mrs Smith (the name has been changed) is one such couple whose stress-free life on the Costa has been ruined as a result of mis-selling here in Spain.

 

After arriving in Spain Mr & Mrs Smith looked through the local English media to find a financial adviser.   Many names appeared in most of the publications and were reassuringly English.  Some were also advertising products by companies known in the UK and they found this familiarity comforting.    After meeting a couple of the advisers they decided to take up the recommendations of one of them as he had been particularly helpful and appeared trustworthy and to fully understand their needs.  He had calculated how much income they needed annually for their retirement and recommended that they invested their capital into an investment product offered by a company whose name they recognised (XYZ Company for the purposes of this article) and which would pay sufficient monthly  income payments for them to live on.

 

Satisfied that they had made the right decision they were able to get on with enjoying their new life, until a year later when a statement showed that their investment capital had been eroded by around 10%.   Concerned, they contacted their financial adviser who explained that the markets had not been performed well recently, but that their capital would recover over time.  

 

They accepted this and put the matter behind them until a year later a statement showed that their capital had been reduced by a further 15%, now a loss of 25% in total, and they worried that their capital would not survive much more depreciation.    They expressed these concerns to their adviser who was reassuring.  He reminded them that they had taken out a five-year plan and that only two years had passed.  In the long term the markets would recover and they would earn back the money they had lost.

 

Unfortunately for the Smiths, when the fund did mature their final payment was only 30% of their original investment, a loss of 70%, and they realised that this meant they could no longer afford their planned retirement.   They also realised that their financial adviser may have been somewhat liberal with the truth and possibly sold them an inappropriate investment.  Now disillusioned with him they decided to approach the XYZ Company directly, only to be told that they must refer back to their adviser.   He, in turn, laid the blame on the stockmarkets and XYZ Company, and refused to accept any blame himself.

 

At this point the Smiths decided to look into the matter further, and worked out that although at the initial meeting with the adviser they had explained that they must have a “safe” investment as they could not afford to loose any of their capital, the investment he had sold them was in fact “high risk”, and this had never been pointed out to them.    They realised that they had been the victims of mis-selling and since their adviser had not invested their money into the type of product they had instructed, approached him for compensation.   

 

However they get nowhere and it become impossible to get in touch with the adviser, who stopped taking their calls.   They then contacted the Spanish financial regulators for help, only to be told that the firm their adviser belonged to was not regulated in Spain.    Not about to give up, they approached XYZ Company again to ask why they dealt with an unregulated company in Spain.  XYZ’s explanation was that the company acted as the Smith’s agent, and not XYZ’s, so if they had any complaints they had to take them up with their adviser.      Slowly and painfully the Smiths came to realise that no-one would accept responsibility and that they will not get any compensation.

 

The Smiths are not alone in this predicament and many people have been mis-sold financial products, with the result that they have lost a lot of money.  Some can no longer afford their retirement and have had to sell their home in Spain and move back to their home country.   Unfortunately they were attracted by the high returns offered and believed the marketing that promised that these returns could be achieved through a low risk investment.   Expatriates often presume that regulations in Spain are the same as they are back home (in the UK for example), that newspaper adverts must be approved by a financial authority of some sort and that the financial adviser will have a  compensation system, the same as would happen in the UK.   Things are, however, very different in Spain and you should not presume that they are the same as in the UK, or take all adverts at face value.

 

In the UK, the Financial Services Authority (FSA) has issued “Principles for Business’ for Financial Advisers in the UK.  These include points to prevent mis-selling: 

 

  1. A firm must conduct its business with integrity.
  2. A firm must conduct its business with due skill, care and diligence.
  3. A firm must pay due regard to interests of its customers and treat them fairly.
  4. A firm must pay due regard to the information needs of its customers, and communicate information to them in a way which is clear, fair and not misleading.
  5. A firm must take reasonable care to ensure the suitability of its advice and discretionary decisions.

 

There is no equivalent of the FSA here in Spain.   If you are thinking of investing capital here in Spain it is therefore essential that you first ensure that the company/independent financial adviser you choose can satisfy these conditions.  You should carry out thorough checks to ensure that the product provider of the investment you have selected has full professional indemnity cover so that you have recourse to full financial insurance protection in the event of the adviser’s negligence and a successful claim, and also make sure that the product itself is approved for distribution in Spain.   It is also important to determine, in advance, precise details of the complaints procedure were a disagreement to arise, and what opportunities exist for independent arbitration in the event that a dispute is contested.   Background checks on the advisory firm are also a perquisite and the firm should be able to indicate its long-term compliance record in all areas of its business activities, be it in Spain or elsewhere.  

 

The Spanish regulators CNMV have a web site and telephone number available for people to check to see if a particular company is registered with them to be able to offer financial advice or services:

Tel:       (0034) 91 585 1500

Fax:      (0034) 91 319 3373

 

Website:  http://www.cnmv.es/index_n.htm?/Advertencias/Nacionales/VisualizaAdvertencias.asp~/vacio.html

 

 

 

 How do I choose an IFA - and what should I ask when I meet them?
You should arrange to meet two or three advisers for an initial discussion, before deciding which is best for you. And you should ask these questions:

? Who are you authorised by? The name of the relevant body may appear on the firm's advert or letterhead.

? What qualifications do you hold, and when did you pass them? If this was two years ago, what have you done to keep your knowledge up to date

? Do you specialise in any area?

You should then consider: Are your questions answered clearly and sufficiently? Do you have confidence in your adviser in general? Are you made to feel silly? If so, find another one. This may be no reflection on the adviser's skill and competence, but in something as sensitive as this, you want someone with whom you are happy dealing, just as with a doctor or solicitor.


Where should I meet the adviser?
It's best if you go to their office. This will help give you a stronger impression of the firm.


How do I spot a good adviser?
They will recommend products, such as tax-free Isas, which do not pay him or her a commission. Be sceptical if the adviser recommends that you buy an investment bond issued by insurance companies. These have no real benefits for you, but the adviser gets more commission than if he sold you a unit trust* investing in essentially the same thing.


Can I check the adviser is authorised?
Yes

The Spanish regulators CNMV have a web site and telephone number available for people to check to see if a particular company is registered with them to be able to offer financial advice or services:

Tel:       (0034) 91 585 1500

Fax:      (0034) 91 319 3373


Where else can I get advice?
You can consult solicitors, accountants and stockbrokers but not surprisingly, they will choose from their expertise: stockbrokers will obviously favour the market they know most about - stocks and shares, while an accountant will be mainly concerned with the tax implications.


What if it goes wrong?
Complaints can only be about bad advice not bad investment performance. First take your complaint to the adviser. If you can't resolve it complain to a regulator. Advisers, stockbrokers and investment managers must be regulated in Spain by the Mercado de Valores (CNMV).

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