IFA Conduct

[ReformedCharacter]

I mentioned in another topic that I've been trying to help a friend who has made a number of unfortunate 'investments' that have a very bad smell about them. One investment was in Paulownia trees in Panama...

It seems that my friend was recommended to invest in the Paulownia scheme by his IFA. His IFA did not handle the investment which was paid directly to Company A. Company A, now dissolved was run by a man who I refer to as 'Mr. X'. The Paulownia scheme was almost certainly a fraud and some fairly incriminating information about Mr. X and his colleagues is available by searching.

However, it seems that the IFA has a longstanding series of business relationships with Mr. X, involving various financial services and investments. I have spent some time going through Companies House searches and there is clearly a history of the IFA and Mr X acting as officers in the same companies, it is quite convoluted but clear to see.

Can anyone advise whether there may be a legal case against the IFA or whether the Financial Ombudsman Service might help?

Thank you.

RC

[Alaric]

Can anyone advise whether there may be a legal case against the IFA or whether the Financial Ombudsman Service might help?

If he's a properly regulated adviser, there's also seeking redress through the FCA (Financial Conduct Authority).

[Clitheroekid]

Can anyone advise whether there may be a legal case against the IFA or whether the Financial Ombudsman Service might help?

Yes, they may well have a case against the IFA for negligence and/or breach of contract.

The main reason IFA's recommend dodgy investments like foreign agriculture schemes or storage pods is that they receive ludicrously high rates of commission. It's quite clear that these commissions are the sole reason for advising the investment, and it's equally clear that such commissions have fatally affected the IFA's duty to give independent advice.

But the initial complaint must be made directly to the IFA. They then have 8 weeks to respond, and only then, in the absence of a satisfactory response, can a complaint be made to the Ombudsman.

But I would very strongly recommend your friend to start the process sooner rather than later. The IFA should carry professional indemnity insurance, but there have been many such cases where the volume of complaints has exhausted the insurance cover (usually only £1m or so) leaving those people who delayed filing a complaint without any redress.