A retired couple claim to have lost hundreds of thousands of pounds by entrusting their retirement savings to an unregulated IFA.
They handed a £380,000 pension fund to Michael Jarrett of Regency Asset Protection, based in Malaga, Spain.
Jarrett marketed his services as independent financial advice, but neither he nor the firm are listed with financial regulators in Spain, which means the couple cannot take their grievances to an ombudsman or apply for compensation.
Jarrett managed their cash for more than 10 years, and during that time the money was invested in a series of risky ventures, says a report in The Independent.
The unnamed couple, now aged in their 60s and 70s, admitted they knew little about financial matters and trusted Jarrett to invest their money wisely to give them an income and a nest-egg to pass on to their loved ones.
Their plan was to draw down 5% of the fund each year to give them a reasonable income with their pensions.
Jarrett invested the cash in a series of high-risk ventures, such as second-hand life polices or ‘death bonds’; teak farming and recycling companies.
The couple said each venture performed poorly and each time Jarrett switched their cash into another investment he received thousands of pounds of commission – estimated at around £19,000.
“Now we have an annual income of around £14,000 a year and have lost nearly everything and can do nothing about the way our money was handled because Jarrett was not regulated to give advice in Spain,” the couple said.
They and reporters have had problems contacting Jarrett who has washed his hands of the matter and declines to comment on his business activities.
The couple are angry with Jarrett, but also blame the companies for taking their cash from an unregulated adviser.
John Parsons, of the Costa Del Sol Action Group runs a service to help victims of alleged unregulated IFAs.
“If an adviser is not regulated, often the only recourse is to take the matter to court, which is costly and has an uncertain outcome,” he said.
“My advice to any expat is to only deal with a properly qualified and regulated IFA. Unregulated IFAs are often difficult to contact once they have someone’s cash and even if they are tracked down, generally have little or no assets to make taking them to court worthwhile.”