Firm Targeting Nest Eggs of UK Expats Faces SEC Probe

Securities and Exchange Commission; SECBloomberg reports that an international financial advisory company has charged upfront commissions for years on investments to UK expats, even though its SEC registration didn’t allow such commissions.

There were a lot of charges. In addition to an annual management fee, the company would charge a fee on the pension transfer that could be as high as 7%, spread over several years (known in the industry as an ‘indemnity commission’), three former employees said. Clients who transferred pensions would have to decide how to invest the money, giving salesmen another chance to earn commissions.

Among the investments the company sold in the US were structured notes from banks including Goldman Sachs Group Inc. and Morgan Stanley, according to the former employees. These investments, a form of derivatives, offered an 11% return if three indexes all went up by a designated date. Meanwhile, the company received a 4% upfront commission, the former employees said.

In 2008, a Singapore subsidiary of the company was fined for using unlicensed advisers and selling insurance products outside its license mandate, according to a statement by the city-state’s regulator. The company closed the office that year.

In Hong Kong, a former subsidiary of the same company was fined HK$3.1 million (USD398,000) last year for breaches including using unlicensed advisers and failing to hand over information to a local regulator.

The same company is on a list of firms published by Japan’s regulator that aren’t authorised to solicit investors. It was on a similar list in Thailand, though it isn’t anymore. Its UK subsidiary stopped providing some pension advice this year amid a regulatory review.

Click here for the full Bloomberg article.

Are you considering transferring your UK pension, or currently hold a QROPS?

See the difference of using a fee only advisor, and learn more about the benefits of having your investment or pension professionally managed by an award winning, UK regulated, discretionary investment manager, speak to Intelligent Investments today.

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One thought on “Firm Targeting Nest Eggs of UK Expats Faces SEC Probe

  1. Don’t need to send this to anyone now 🙂

    Colin Tan, CFP

    “The greatest compliment that you can pay me is to refer me to your family, friends and colleagues”.


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