We need to ensure this cannot happen again.

Financial Advisor
Financial Advisor

chorus logo

I’ve been battling with myself over the last few days as to whether to write this article, and indeed what to say. As many of you will have heard by now, one of the largest financial advisory companies in our region lost their license last week. This has left countless clients unsure as to their financial future. It’s an incredibly sad and disturbing situation.

Those of you who have been reading my articles or attending my seminars over the last few years will know that I’ve been warning against certain practises used here in Spain, by a large number of financial advisors, that would be illegal in the UK. It was just these practises that lead to a financial advisory company causing large losses for many of their clients, and ultimately losing their license. All I can do is to continue with the same message, because what happened last week was entirely preventable.

In the UK, it is illegal for financial advisors to offer funds or structured products that pay an upfront or ongoing hidden fee to the advisor. These rules prevent financial advisors from being biased towards a particular investment, ensuring that only the very best, high quality funds are recommended.

This year alone, I’ve had over 50 people ask me to look at plans set up by other financial advisors in the area. These are mainly investment portfolios held in QROPS and Spanish bonds. Every portfolio I looked at, without exception, contained funds that paid the advisor hidden fees to recommend them, which shows how prolific this problem is here in Spain.

Despite the number of times I see this, it still upsets and disturbs me. These are often small funds, with little track record, that cost 4 to 5 times more than other funds in their category, and under-perform the benchmark. The financial advisor has put their needs, i.e. being paid a hidden fee, before the needs of the client. This is absolutely unacceptable practice, and the sooner it becomes illegal in Spain, the better.

Sadly, what happens when you have an industry acting like this, is that more and more people are put into low quality investments, and sooner or later, we have a situation like we had last week.

For me I’d expect to see an investment portfolio full of UK based, FCA regulated funds, which can’t use these illegal practises. Household names like Fidelity, Investec, Rathbones, The Prudential, Fundsmith, Vanguard etc. Fund houses with decades of track record; funds used by the top financial advisors in the world.

I firmly believe that educating the public is the only way to prevent what happened last week from happening again. Thousands of you will be holding such investments already, without even knowing, or about to sign paperwork that will unwittingly tie you into such a plan. You can invest safely and securely in Spain, and you should expect access to the same quality of financial advice as you would receive in the UK.

If you, a friend or family member, are considering a new investment or pension transfer, it is essential to seek a second opinion BEFORE paperwork is signed. Anyone with an existing plan should have this reviewed immediately.

I will gladly look at any new proposal or existing plan without charge or obligation, and give you honest feedback. Please either email me on [email protected] or call me today on 664 398 702. Now is the time to act to ensure you do not become the next victim of rogue financial advice here in Spain.

Sam Kelly, Managing Partner
Sam Kelly Managing Partner
© No part of this web site may be reproduced without written permission from the publishers. All rights reserved. Todos los derechos reservados.


Please enter your comment!
Please enter your name here