A group representing investors into the beleaguered Harlequin property group have won a victory over the advisers who “facilitated” the investment into the unregulated investment.
Acting on behalf of an investor, the Harlequin Investor Group (HIG), which is run by Regulatory Legal and represents over a thousand Self-Invested Personal Pension (SIPP) investors, has had a complaint against an adviser upheld by the Financial Ombudsman Service (FOS).
SIPP transfers
Investors into Harlequin property resorts and developments have been fighting an on-going battle to see a return on their investment for over a year. Many investors used their pensions to invest, having transferred existing plans to a SIPP following advice from agents and advisers. Both financial and legal experts have been worried for some time, that in many cases this advice was floored, including many transfers which were inappropriate, with some coming from gold-plated Final Salary pensions.
Indeed, the HIG is now pursuing claims on behalf of investors against around 10 advisers, worth up to £200 million. An additional five SIPP providers are also being targeted with, the HIG citing a lack of due diligence.
The case upheld by the Ombudsman involved an adviser who claimed he had only ‘facilitated’ the pension transfers and not recommended the non-regulated investment. However, the Financial Services Authority had previously warned that: “If a financial adviser recommends a SIPP knowing that the customer will sell current investments to invest in an overseas property, then just how suitable the overseas property investment is must form part of the advice to the customer.”
On this occasion FOS ruled that the adviser was indeed liable for the investment and found In favour of the investor. Although the adviser is expected to appeal, HIG believe that it could become a test-case in other unrelated actions.
Harlequin Investor Group
Investors can find out more about the Harlequin Investor Group by clicking here.
