Expats are easy pickings for scammers and fraudsters who try to persuade them to put their life savings in tor risky investments.
Several expat forums are buzzing with gossip about dodgy financial advisors – especially operating in Spain.
They claim the state of the Spanish economy is not helping expats are drawn in to get-rich-quick schemes as they see their money dwindling in a stagnant economy and collapsed housing market.
Among the victims is one couple on the Costa Brava who struck up a friendship with a financial adviser and decided to use him to implement an investment strategy.
Despite telling the advisor that they were only interested in low risk investments, he persuaded them to invest their money in high risk investments. The couple assumed that the adviser was an expert and gave in to his advice.
Checking out advisors
Sadly, the couple lost more than £60,000 of their savings and they have been left devastated by the experience.
Bona fide financial firms are warning expats only to deal with regulated and qualified financial advisers.
In many cases, this means checking web sites or telephoning regulatory bodies as paper documents or web site claims can be misleading or forged.
Key questions include checking the advisor’s experience and qualifications. Personal references are not necessarily reliable – experienced scammers can set up false testimonials while few advisors are likely to put forward anyone who will speak badly about them.
Fees and charges are an important point to check from the start. Do not part with any upfront money and make sure you are fully aware of any commissions or fees in writing.
Never hand over your money to anyone unless you are completely sure of their credentials.
Pension liberation
Don’t fret about taking a second opinion on any advice – after all the profit or loss could be life-changing.
Meanwhile, another financial company is warning expats about dodgy pension liberation schemes.
AXA Wealth is warning people tempted to access their pension savings pot before they are legally entitled to do so to be cautious.
The firm is following in the footsteps of Legal & General in delaying transfers to suspicious providers to check they are not running scams.
Their stance comes after recent warnings from the Financial Services Authority about their concerns of pension liberation schemes which offer people an opportunity to cash in their pension pot but the firms concerned charge high fees and the pot is liable to a 55% penalty charge from HM Revenue and Customs.
Axa’s managing director Nick Elphick said: “We deem any form of pension liberation scheme as wholly inappropriate. It might seem to be a great short term solution, but as the saying goes, if it seems too good to be true, it probably is.”
