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How to spot a rogue financial adviser

Find out the common tricks and tactics rogue financial advisers will use to try and take your money away from you and know the steps to help ensure you avoid making a massive financial mistake

Written by E4E Editor on 22 February 2022

The financial advisery world centres around money and the desire to increase the financial capital that one has. To make good decisions about financial products and investments will normally require the expertise of a trusted independent financial adviser who is qualified and has experience.

Unfortunately, while there are many such advisers who act with the upmost integrity, there are also a number of rogue advisers and advisery firms whose intention is to specifically take advantage of consumers, often resulting in significant financial loss for the consumer in question.

While there are some protections and regulations provided by independent organisations such as the FCA in the UK, often their ability to protect and provide insurance over rogue advice provided to people living abroad is limited.

Ultimately it will come down to the consumer to make a good decision and key to this is being able to identify and reject advice provided by rogue advisers.

This article has been primarily written for British expats living outside the UK, however, a lot of the information will hold true when spotting rogue financial advice anywhere in the world.

Using false FCA credentials

If a non-UK based financial advisery firm is claiming that they are regulated by the FCA, this is unlikely to be true. In the first instance it is always a good idea to check on the FCA register that the information provided on their website or any documentation is accurate and up to date.

Some firms will use false credentials that look accurate to mislead, so you should always check that the credentials at least exist and are being correctly applied.

Incorrectly claiming FCA regulatory authority

We have written an article which looks at the role of the FCA outside the UK with a specific focus on the level of jurisdiction and authority they have regarding British expats and non-UK based firms.

The fact is that the FCA has very little and in most cases absolutely no jurisdiction outside of the UK, other than ensuring advisers providing pension transfer services have permission to provide such advice.

This will not stop some financial services firms claiming that business is FCA regulated. While it may be true that an organisation may be part of a group of firms and one or more firms within that group may be FCA regulated, the non-UK based entities will not.

If an adviser is trying to claim that they do because they also have an office in the UK that is FCA regulated, this is almost certainly untrue and they are misusing the FCA as an attempt to provide peace of mind.

In the worst case it might be that the firm in question has no connection to the FCA regulated firm and are merely mimicking their identity.

It is always a good idea to check the with any UK office whether they have ties and the extent of those ties if they exist.



It is typically human nature to react to fear and making financial decisions is certainly no exception to this. Nobody wants to lose their investments or be damaged by circumstances out of their control.

Rogue advisers will typically use such tactics to scare people into making bad decisions – often incorporating time critical factors when pushing such techniques.

Once such approach that has been used recently surrounds QROPS and Brexit where rogue advisers have tried to claim that once UK leaves the EU, British expats with UK based pensions will no longer be able to hold these pensions is utter garbage.

Not withstanding the fact that the terms for the UK’s departure from the EU have not yet been formalised, it is incredibly unlikely that any element of UK pensions will be affected in such a way that the only option is a pension transfer to a QROPS.

The truth is that Pensions and Investments can be highly lucrative for rogue financial advisers, who can receive massive commissions for transferring pensions and advising on investments which can tie clients into products (in some cases up to 15% of the value of the pension) and some unscrupulous individuals will use any scaremongering to force a pension transfer through for the reasons set out above.

Lack of clarity around payment, financial compensation and commissions

In the UK, under FCA regulations, financial advisery firms are only allowed to provide advice on a fee-based basis unless insurance based.

While this is also the case in other jurisdictions, this is not a universal rule and there are many firms operating internationally that still operate using a wide range of highly lucrative (for them) fee structures, using a combination of commissions, charges and fees which will all eat away at any investments or capital that you have.

In most cases and adviser will inform the client what they are being paid but not exactly what the client is paying. Many but not all advisers work on a percentage basis of income generated so if they are on a 60/40 split and they will tell the client they are earning £3k from the agreement but the company is getting another £2k, meaning the total charge is £5k.

Unfortunately, these payment structures are perfectly legal, but can have massive consequences.

So, before proceeding with any advice, ask questions around the fee structures and ensure you fully understand what you are paying for, what that firm is earning and what the adviser is earning. In nearly all cases, before the end of the first formal meeting, the adviser will have an understanding of what the charges are likely to be, so it is never too early to start asking the question.

It’s important to be aware that this is not always the case and there are a growing number of firms which are voluntarily moving towards a fee-based charging structure to provide clarity and ensure that your investment is not negatively impacted.

Poor choice of financial products

One of the biggest giveaways of a rogue adviser is the actual financial products that they advise people to choose. While most financial products are suitable for someone, however long-term savings plans which are often pushed to expats (for example companies like Generali Vision, Zurich Vista) are often laden with commission for the adviser and can have terrible fees and charges for the consumer.

Long term savings plans are termed based products that pay the adviser based on how much the client saves regularly and the longer the term signed up the better for adviser.  An example of how much the adviser could receive would is often calculated as follows:

Monthly premium x 12 (i.e. 12 months in a year) x Number of years (eg. usually a minimum of 5 years)  X 3.5%.

The adviser may then mislead the client using statements such as:

“You are only committed to this amount for 18 months (in many cases) then you can change it” however, this is specifically referring to the advisers cooling off period, and nothing to do with the client’s actual commitment. What this actually means is that if a client cancelled their policy, stopped or reduced their contributions within the first 18 months the adviser would have to pay the insurance company back – which they obviously do not want to do. So they use a statement such as this to deter the client from making any changes in the initial 18 months.

Unfortunately, when a client decides to reduce their monthly premium once the 18 months is up, the figures originally set out in the contract are not reduced. This means that, while the product was already expensive, for example costing 3.5% per annum, and the client reduces their contribution by half the cost as a percentage figure would rise to the equivalent of 7% per annum.

An adviser may also mislead over payment holidays in such schemes where the adviser will state that the products are flexible enabling a client to a payment holiday. While this is technically true, the suggestion is that the length of the term will not increase, but what will happen is that the payment holiday taken will actually be added to the end of the contract. For example, if a client had a 10 year term and the client took a one year payment holiday, this one year would be added to the original 10 years to make it 11 in total.

Being advised on the whole story vs part story

Rogue advisers may also use a tactic where they only provide half the story. From our experience, clients have previously received reports only detailing the structure and often state that final investment decisions will be made at “a later date”.  This is crucial for anybody looking to make an investment decision off the back of financial advice as it is impossible to make an informed decision with only half the information.

This is often done to make their advice look competitive when compared to existing plans.  Unfortunately, compare part of the story with the whole story is like comparing apple and oranges as the existing plan will often provide the details of the total cost compared to what is often in the initial report.  Where it becomes even more confusing is those additional costs are often similar to the first set of costs and therefore one could assume they are the same thing.

Again, if you ever feel that something is missing, or you have actively been told that more will follow, you should not make any commitments until you have the “whole story”.

Changing contractual terms without authorisation

Every day we are bombarded with contracts for services. In many cases, people will often check the box or sign the contract with the express understanding that the service provider will have document exactly what was expected.

However, with financial decisions, so much is as stake when signing any contract, it is absolutely vital that you read and re-read any contract that you have been asked to sign.

You must never assume that everything is as discussed and always check the fine print. If something isn’t clear, it is essential that you double check everything. In some cases, rogue firms have taken further steps to persuade clients to sign additional fee sheets which explain structural costs. If the client has signed these sheets without reading the detail, these fees can be charged and when the client discovers the additional charges, the rogue adviser will simply say that the client signed the agreement and they were told.

While in the EU, laws and regulations such as MiFID II are coming into play which require licensed firms and advisers to record all written and spoken communication to provide evidence of discussions, once you have signed a contract or agreement, it will be very difficult and potentially very expensive to correct any incorrect terms which were changed without your knowledge.

It is far safer to ensure you know and understand everything that you are agreeing to, and actually agree with it, in advance and if not, avoid signing anything.

Things that you should specifically be checking include:

  • Company details
  • Investment options
  • Overall tie in period (If any)
  • Cool off period for changing your mind

Does it sound too good to be true?

While some financial products can perform well, quite often if something sounds too good to be true, it quite often is. And it is the rogue adviser’s prerogative to upsell the opportunity to ensure that it sounds like a “no-brainer” investment option.

Often rogue advisers will use unusual alternative investments, or schemes which are simply not safe and promise the earth with absolute simplicity.

While it may sound obvious, if something sounds too good to be true, but you cannot spot the downside – the best thing to do is contact a different independent adviser for a second opinion.

Was the initial contact unsolicited?

One of the most common ways for rogue advisers to push their products is to make first contact. They will literally spend their entire time on forums, LinkedIn, Facebook and contact anybody and everybody British who lives abroad.

Much like double glazing salesmen or PPI claims specialists, they are merely hitting the numbers and hoping that someone will begin a conversation. In most cases, the “adviser” will use some/all of the approaches used in this article.

If you receive an unsolicited call, always treat with extreme caution. Of course, advice being pushed *may* turn out to be suitable – but you should always seek independent advice first to ensure that you are not being sold.

The misuse of “friendship” and the application of pressure

Financial adviser relationships with clients will, if things go well, last a very long time. Therefore, relationships tend to be relatively friendly.

While this is perfectly understandable and desirable in many cases but is a situation which can also be open to abuse. The friendly approach will often begin at the beginning of the relationship, but always question an overly friendly adviser.

However, the major misuse of the “friendship” is that they will start to put pressure on using terms such as “trust” and “pressures from management” to try to encourage someone to make a decision more quickly than they either need to or want to.

If you ever feel like you are being pressured, whatever the reason, always question the motive of the person applying the pressure. Ultimately, this is your life and your money and you must always be comfortable with the decision you are making. If you feel uncomfortable, you should always feel able to ask the adviser to “back off”. If they do anything but and continue to apply pressure, it would be highly advisable to seek a second opinion on what’s being advised.

Need a second opinion? Request a free consultation through us

If you’ve been contacted by someone who you’re unsure about you should always seek a second opinion. At Experts for Expats, we have built a network of financial advisery firms in the UK and internationally which offer independent financial advice that can be trusted.

If you would like a free, independent consultation with an adviser from one of the firms in our network, enter your details using the form and we will arrange for an adviser to contact you within two working days to set up your consultation, and confirm their details with you beforehand.

The consultation itself is free and will last between 15 and 30 minutes. It is designed to cover as wide or narrow a range of subjects as you require. The adviser will be able to offer advice on investments, pension transfers, mortgages, property management and the tax implications of moving abroad.

Once the consultation has been conducted, if you wish to continue using the services of the firm we introduced you to, you will be provided details of the potential fees and charging structures, but you will be under no obligation to proceed with any advice provided.

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Ian M. Qatar, Investment Advice

As an expat who has been living outside the UK for 30 years, it was reassuring to speak to a representative of your company who seemed to have his clients interest at heart, especially when the client has no expertise in finances and investment.

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