A couple is pursuing national IFA firms Positive Solutions and 2plan Wealth Management for what they claim was negligent advice to invest in high risk unregulated investments - including using money they had received from a critical illness (CI) payout.
The couple initially took advice from a husband and wife duo of advisers when the pair were part of Positive Solutions in early 2007, at which time the investors said the advisers were aware of an imminent payment to the couple from a CI policy for the sum of £312,000.
As part of the client arrangement, according to the investors, the adviser couple levied an upfront charge of £3,000 for the advice, plus, from February 2007, a £500 monthly retainer.
However the monthly payments did not necessarily preclude the receipt of commission on the investments, which included putting £50,000 into Glasgow hotel development scheme SI Limited Partnerships, and £90,000 - plus £10,000 legal fees - into Cypriot property investments with Alpha Bank.
A London law firm is currently pursuing 67 financial advisers who recommended clients invest hundreds of thousands of pounds in off-plan Cypriot properties with Alpha Bank which have either failed to be built or have plummeted in value.
In addition, £176,000 was transferred from a self-invested personal pension (SIPP) onto the Transact platform and into a Sycamore fund investment, another high risk unregulated product.
The investors' relationship with their advisers continued into 2008, when, in March that year, the advisers moved to 2plan.
The advisers continued to levy a charge of £500 a month on the investors, though again this did not necessarily mean they were not accepting commissions.
The couple claim that they were advised to invest again in unregulated schemes - this time in troubled overseas property company Harlequin, with £55,000 going to an investment in St Lucia, and a further £28,500 in Barbados.
The investors - who are represented by law firm Regulatory Legal - have also complained that they were advised that all these products were low risk.
They maintain that they are unsophisticated investors, that the products do not match their attitude to risk, and that indeed the advisers failed to find out their attitude to risk in any great detail.
They want 2plan and Positive Solutions to repay them to put them back into the situation they would have been in had they not invested just over £400,000.
Neither 2plan nor Positive Solutions were prepared to comment on the specifics of the claim: Positive Solutions said it would not respond while the claim is ongoing, while 2plan said it would conduct a full investigation before commenting.
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