By Chris Lang
The Financial Services Compensation Scheme has paid out £4.7 million over a firm of independent financial advisers called Total Wealth Solutions. Total Wealth Solutions went into voluntary liquidation in June 2017.
Citywire New Model Adviser reports that in 2013 the Financial Conduct Authority “requested a third party to review the pension transfers made by Total Wealth Solutions”, but that the “reasons for this action are not clear”. At the end of his Twitter thread, Beckett raises the question about the role of the Financial Conduct Authority in this story. “Didn’t see a thing, didn’t hear a thing and most definitely didn’t do much of anything at all,” he concludes.
Total Wealth Solutions was one of the IFAs connected to the Green Retirement Pension Plan. In February 2017, the trustee of the Green Retirement Pension Plan told more than 70 members of the scheme to make claims against their IFAs over investments in Global Forestry Investments’ teak plantations in Brazil.
Global Forestry Investments
REDD-Monitor first wrote about Global Forestry Investments in March 2013:
Global Forestry Investments offered investors the opportunity to lease of plot on their teak plantations in Brazil, for a minimum of £5,000. The company claimed to give returns between 10% and 20% per year.
The land was “held in beneficial ownership for the investor” by a company called Title Trustees International, a subsidiary of Hutchinson & Co. Trust Company Limited. Another of Hutchinson’s subsidiaries was Citadel Trustees, which changed its name to Highpoint Trustees, and is currently under investigation by the Financial Services Compensation Scheme.
In July 2019, the Serious Fraud Office charged Andrew Skeene and Omari Bowers, the directors of Global Forestry Investments, with:
- Three counts of conspiracy to defraud contrary to Common Law
- Four counts of using a copy of a false instrument contrary to s.4 of the Forgery and Counterfeiting Act 1981
- Misconduct in the course of winding up contrary to s.208(1)(d) of the Insolvency Act 1986
- Making a false statement without oath contrary to s.5(c) of the Perjury Act 1911.
“The charges relate to alleged frauds concerning Global Forestry Investments between August 2010 and December 2015,” the Serious Fraud Office notes. Skeene and Bowers face trial in Southwark Crown Court on 21 February 2022.
Total Wealth Solutions
A spokesperson for the Financial Services Compensation Scheme told Citywire New Model Adviser that,
“FSCS has received 128 claims against Total Wealth Solutions. Of these, 111 were successful, nine unsuccessful and eight claims are being assessed. FSCS has paid out just over £4.7m to date.”
The most recent liquidator’s progress report for Total Wealth Solutions (dated 18 May 2021) states that,
I can confirm that during the period under review, a significant claim (£7,488,414) was received from the Financial Services Compesation Scheme in respect of compensation claims that have been awarded to self-investors who have suffered losses as a result of the company’s trade.
If you lost money after taking advice from Total Wealth Solutions, you might be able to make a claim via the FSCS website:
In February 2017, the FT Adviser reported the story of Mr G, who lost money after Total Wealth Solutions arranged the transfer of his pension to Global Forestry Investments.
An unregulated firm contacted Mr G and referred him to Total Wealth Solutions. In June 2021, TWS sent Mr G a report about transferring his penion and one month later Mr G signed an application form to join the Green Retirement Pension Plan.
The nominated investment in the Green Retirement Pension Plan was Eco Quest PLC. According to the company’s website, Eco Quest’s only investment was in 300 hectares of Global Forestry Investments’ teak plantations.
When Mr G contacted the unregulated firm that first contacted him about accessing his pension fund they told him to contact Green Trustees, which is acting as Trustee and Administrator of the Green Retirement Pension Plan and three other pension schemes. Green Trustees told Mr G that the Green Retirement Pension Scheme was a fraud and was practically worthless.
Mr G contacted the Financial Ombudsman Service who agreed to look into Total Wealth Solutions’ role.
The ombudsman, Roy Milne, ordered Total Wealth Solutions to pay compensation to Mr G, for failing to give suitable advice about the investment:
“If TWS had given suitable advice, Mr G would not have suffered the loss. I accept that other businesses were involved in the transfer. I think that TWS gave unsuitable advice that has caused Mr G to suffer a loss.”
The Green Retirement Pension Plan
In November 2017, Jonathan Purle of Green Pension Trustees sent a 23-page report to the Financial Service Compensation Scheme about the pension schemes for which it is acting as trustee, including the Green Retirement Pension Scheme. Purle calls these the “Green Schemes”.
These pension schemes were designed by Mark Harris, a solicitor of Alexandra Chambers, and his company AC Management & Administration Limited (ACMAL).
Purle wrote that,
We believe it is likely that the Green Schemes were established in part to facilitate the distribution by IFAs of non-standard investments that, by that time, providers of Self Invested Personal Pensions (‘SIPPs’) were already choosing to reject.
Purle found that the Green Schemes did not produce formal accounts or formal trustee reports. In January 2014, ACMAL’s bankers closed their accounts. Other banks were unwilling to open an account for ACMAL, “causing monies to effectively be frozen”.
Green Pension Trustees could only get banking records via the Economic Crimes Unit of South Wales Police. ACMAL operated a single account that included payments from a number of unrelated pension schemes.
Purle wrote that,
It should be understood that this breakdown in the administration of the Schemes has caused many members severe stress and often illness.
A long discussion on the Money Saving Expert forum gives some indication of the stress involved:
After numerous calls to Mr Harris, who for some strange reason will not take telephone calls and can only be contacted via email or by leaving a contact number so he can call you back, which he never does. In fact the only time Mr Harris actually called back was when I left a message saying that if he didn’t call me back before close of office the matter was being reported to The Serious Fraud Office.
More than £1.6 million was invested on behalf of 76 members of the Green Schemes into Global Forestry Investments’ teak plantations in Brazil. Purle writes that the investment “amounted to an unregulated collective investment scheme” that ultimately “proved to be fraudulent”.
Green Pension Trustees concludes that the money invested in Global Forestry Investments has “in effect been lost”.
Eco Quest PLC
Green Pension Trustees notes that about £5.3 million was invested into debentures issued by Eco Quest PLC on behalf of 219 members of the Green Schemes.
Investopedia defines a debenture as follows:
A debenture is a type of bond or other debt instrument that is unsecured by collateral. Since debentures have no collateral backing, they must rely on the creditworthiness and reputation of the issuer for support. Both corporations and governments frequently issue debentures to raise capital or funds.
In October 2012, Eco Quest PLC announced that,
The directors of Eco Quest Plc (the “Company”) are delighted to announce that as the Offer of up to 3,000,000 5% Secured 5 year Debentures £1 per unit nominal value has been subscribed in full a second offer for up to 1,000,000 debenture units has been issued. The second offer is on identical terms to the first offer. It is intended that a full prospectus will be issued shortly.
The directors are also pleased to announce that the total funds invested to date amount to £1,759,662.
Eco Quest PLC was incorporated in June 2012, raising the question of how investors believed they could rely on either the company’s creditworthiness or its reputation when handing over their money only a few months later.
In Eco Quest’s accounts for 2014 filed with Companies House, is the following statement:
The directors are aware that material uncertainties exists about the entity’s ability to continue as a going concern, but have prepared the accounts on the going concern basis. Last year the company invested £2,204,224 in a teak plantation in Brazil with an assured return of 8%. The intention was that the company would be working with the plantation operator to increase this return through economies of scale and through the development of additional revenue streams. However following an on-site review by a specialist consultant, it would appear that proper title to the land was never completed. The Company is taking action through the UK courts for the return of the investment.
Green Pension Trustees points out that although Eco Quest’s debentures are quoted on the Emerging Companies Market operated by the Cyprus Stock Exchange there is no secondary market for the debentures:
The illiquid nature of these debentures has caused immense stress for those members of the Green Schemes who wish to transfer out of their Scheme and back into regular insured personal pensions.
The debentures were due to mature in November 2017. But Green Pension Trustees comments that,
Eco Quest Plc must now dispose of a number of its assets in order to raise the redemption monies. These disposals however are contingent upon third parties completing their own corporate transactions.
Whilst we remain hopeful of full redemption being completed by the summer of 2018,
there is clearly uncertainty as to the timing of actual redemption and an element of
uncertainty as to the final amounts likely to be received.
According to a comment from “Davnik” on a discussion on the Money Saving Expert forum dated 4 January 2021, the money had still not appeared:
Well it’s now over three years since this investment should have matured — 31 /12 2107.
I have just written to Green Pensions Trustees and JLG / EcoQuest again.
I will NEVER give up!
GXG Markets Exchange
Eco Quest was listed on the GXG Markets Exchange. That in itself is a potential red flag. In November 2013, Richard Smith wrote the first of a series of articles on Naked Capitalism about GXG Markets. Eventually, the Danish regulator Finanstilsynet acted, and in August 2015 it closed down GXG Markets.
Writing in FT Alphaville, Paul Murphy described GXG Markets as “a European scam-central for listed small-caps”. Not every company on GXG Markets was a scam, “But GXG was first and foremost a gift for scamsters”, Murphy wrote.
Paul Seakens was a director of Opus Capital, which was also listed on GXG Markets. Opus Capital, according to a statement by the company on GXG Markets’ website, “focusses on assisting smaller companies raise private equity and when the time is right assists them to list on the GXG Markets Exchange”.
A company called Alfred Henry Corporate Finance was Eligere Investments’ GXG Corporate Adviser.
Alfred Henry Corporate Finance was also Eco Quest’s GXG Corporate Adviser. Eco Quest’s auditors are a company called Jeffreys Henry LLP, a company which shares several directors with Alfred Henry Corporate Finance, as well as the same address.
Another company with links to Eco Quest is the Just Loans Group, now renamed as JLG Group plc. The companies share several directors, including John Davies, who controls Eco Quest, and is a director of JLG Group. JLG Group is still offering debentures.
Another of JLG Group’s directors was Sir Eric Peacock, who also popped up a while back as a director of Thorn Medical – a company that in 2014 hired Opus Capital as corporate advisers and that has appeared several times on REDD-Monitor.