Expats warn others to do research on financial advisers

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British pensioners who left the UK for a better quality of life in Spain are warning their fellow expats to beware of unscrupulous financial advisors.

Speaking exclusively to iexpats.com, Costa Brava-based John and Carol Woodall say they were encouraged by “a cowboy adviser” to gamble their life savings in high-risk investments.

“We’d never invested before, but with the income from our British pensions falling in real terms month by month, we decided we should invest some of our life savings into a lucrative fund recommended by a supposedly ‘qualified and experienced’ financial adviser,” explains retired retailer John, 68, originally from Macclesfield.

“We met the chap at a social event in a nearby hotel and had kept his business card.  We got on well and, when we decided to do some investing, we called him for advice.

“Meeting over coffee in an upmarket resort, he told us about some funds we should be investing in ‘for unprecedented returns’.  We explained that, as inexperienced investors, we wanted ‘low-risk’ but he kept pushing these higher-risk options.

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“Eventually, we acquiesced to him – after all, what did we know?  He was the ‘expert’, he seemed trustworthy, and he assured us that we’d make a lot more money if we followed his advice.  And we desperately needed the money!  The bills were mounting up!”

However, the adviser’s assurances turned out to be quite different as the investments turned toxic.

“The value just plummeted.  And we lost a total of about £63,000 in shares,” says John.

Former midwife, Carol, adds: “It is heartbreaking. I can’t stop crying.  We worked so hard for that money and now it’s just gone.  I would have rather given it away to family or a charity!

“We feel pretty stupid to have so readily trusted this snappily-dressed, well-mannered man who claimed to know his stuff.

“Most of our friends, who have great advisers, will testify that there’s no doubt that if you get an experienced, bona fide financial adviser they can really help you with your finances – that’s why the rich and famous all have them, I guess!

“However, you must ensure you do your research otherwise you could lose a fortune, like we have.

“I hope no-one else goes through what we have.”

Sadly, as a reporter here in Spain, I have heard many such horror stories.  But equally, and as Carol herself suggested, these pale into insignificance when you compare them to the countless number of people who have hugely benefitted from seeking advice from a financial advisor.

So, what’s the answer? What should you look out for when meeting a potential adviser?

Here are our top tips:

  1. As well meaning as they may be, don’t rely on friends’ recommendations.  You must check the adviser’s credentials thoroughly yourself with the relevant authorities.
  2. Ensure that the adviser is authorised and experienced in the investment area relevant to you.
  3. Ask the questions that need to be asked – don’t be shy about those difficult  or awkward questions, especially about experience, track record, qualifications, and how they get paid. Again, see proof.
  4. Meet the people that the adviser offers for recommendations.
  5. Always make sure he or she is an independent financial adviser (IFA).

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