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DeVere pays 190k for misselling

Added 5th February 2015

A financial adviser has won a long-standing battle against deVere UK to return £190,000 to his clients after the multi-national advisory firm mis-sold high-risk products.

DeVere pays 190k for misselling
Victor Sacks, who works as an IFA at advisory firm Ringrose Grimsley, took on the couple in 2012 after learning that deVere had advised them to invest in unregulated collective investment schemes (UCIS) six years ago.
He took the case to the Financial Ombudsman Service (FOS) which upheld the complaint, agreeing that deVere’s recommended portfolio had been “unsuitable” for the clients’ who had been deemed to have a “cautious to realistic” attitude to risk.
Despite the FOS demanding that deVere pays the maximum £150,000 in reimbursement to the couple in July last year, the advisory firm took more than seven months to pay the money, causing the FOS to threaten to take the case to the Financial Conduct Authority.


“The process was long-winded,” said Sacks. “Particularly at first because there seemed to be a lot of procrastinating from deVere.
“This company dragged its heels for two years when I’m sure it has the financial means to pay straight away.”
However, he said it was a “forward nod” to deVere that they eventually paid all of the money they owed.

"Not fully appropriate"

In a letter sent to the couple in October 2012, deVere said: “The adviser did not fully demonstrate that you were a sufficiently experienced or sophisticated investor client at the time of the advice.
“I concluded that the investments made in these funds were perhaps not fully appropriate for you.”
The FOS pointed out in its decision notice that UCIS should only make up a small proportion of the portfolio of a typical investor”, however, Sacks’ clients had around 65% of their £290,000 offshore bond invested in UCIS.
It also highlighted that four of the five funds the couple had invested in were suspended in 2012, including the EEA Life Setlements Fund.
In addition to the £150,000, the Ombudsman said deVere should pay £400 for the upset caused by the “significant loss of capital”.


Sacks and his clients are currently deciding whether or not to pursue the company for the extra £121 per month management fee which, Sacks said, “deVere asked for when there was clearly no fund to manage”.
“The outcome of this case is fantastic and has restored my faith in the industry,” he said. “But I have to say the most galling and awful thing about this is that these clients have been disillusioned by this experience and will never invest again. 
“All of the hard work from some financial advisers is being undone by big corporations, particularly when issues like this enter the public domain.”

"Unavoidable delay"

When asked for a response, deVere said it “regrets that the funds that were suggested in this particular instance, and which were subsequently agreed upon with all the parties involved, were not fully suited to the risk profile.  
“We accepted a mistake was made and for this we apologise unreservedly.  We also rectified this mistake and reimbursed the clients.
“There was a regrettable yet unavoidable delay with in this settlement, due to third party involvements and legal obligations.”
It added: “Since this case came to light, the manager responsible has been dismissed and our extensive procedures to assess risk appetite have been further enhanced.”
This story was updated on 6 February 2015

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About Author

Katherine Denham

Last Word Media

Katherine is a reporter for International Adviser, covering global news stories about the financial services industry. She joined Last Word Media in October 2014 after working for a local newspaper. Katherine has a degree in English from the University of Liverpool and an NCTJ diploma in journalism.


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