IFA Portafina LLP, who were previously registered with the FCA under the name Portal Financial Services LPP (trading as Portal Financial), have had no less than 19 complaints upheld by the Financial Ombudsman regarding their advice to put client money into Unregulated Collective Investment Schemes (UCIS) or similar High-Risk investments through SIPPs (Self-Invested Personal Pensions).
Portal/Portafina’s track record with the Financial Ombudsman seems to date back as early as 2014, and while there are other cases recorded as being upheld against their practices, these 19 cases do seem to have stark similarities, mostly involving investments in high-risk and unregulated schemes (or similar) that were not suitable for client through their Pension.
Portafina / Portal Financial Services LLP Case examples
Most cases centred around similar investments, either singular investments or combinations of:
- The Hypa Asia Fund “Invested in ‘offplan’ villas and hotel rooms which it was intended would be resold at higher prices.” (Case DRN7997366)
- The Raithwaites Hypa Fund – An overseas property investment
- The Koroni Fund “loaned money against assessed financial claims.” (Case DRN7997366)
- Venture Oil “Pre purchased crude oil at an agreed set price and then sold it back to the open market. “
- EOS Solar “Invested in Solar Thermal power development in Cyprus, to sell electricity at a fixed price over a 25 year period”.
Some investments were left unspecified in the Ombudsman case files.
Portal Financial Services LLP – Case Example 1
Ms T was earning “£12,000 gross” and had a “moderately cautious” investor profile, with “no savings or investments”.
On the advice of Portal Financial Services LLP, she invested 80% of her SIPP pension into UCIS investments, including Hypa, Venture Oil, Raithwaites Hypa and EOS Solar – all high-risk investments, and non-standard products.
Through this Ombudsman decision, it was also determined that “One of the advisers in Portal was also a general partner with that fund. This potential conflict of interest was not told to Ms T.”, relating to the Raithwaites investment.
“The previous industry regulator, the Financial Services Authority (“FSA”), has said that it considers a UCIS as having a high degree of volatility, illiquidity or both and therefore it is usually regarded as a speculative investment and, in practice rarely regarded as suitable for more than a small share of an investor’s portfolio.” said the Ombudsman providing the final decision.
“Ms T had a low attitude to risk. She wanted to preserve her pension fund. Portal advised her to invest in these two UCIS, knowing that they had a liquidity risk”.
Portafina LLP – Case Example 2
The Ombudsman said, “Mr C was advised to invest in the Hypa Raithwaite Fund, Hypa Asia Investments and the Koroni Fund”.
“Mr C was advised to invest about 90% of his SIPP into the three UCIS investments at a time when he was only a few years from wanting to take an income from his pension. This in itself presented material risks given the illiquidity risks associated with the UCISs.”
“In my view these investments presented significant risks of capital erosion.”
“I haven’t seen any persuasive evidence that suggests Mr C was a particularly experienced or knowledgeable investor and I think he would likely have relied heavily on the firm’s recommendation in making his investment decisions.”
Mr C’s case was upheld on grounds of suitability, and the FOS went on to detail what Portafina should pay in terms of “fair compensation” to Mr C.
Get Claims Advice Ltd is a claims management company, regulated by the Claims Management Regulator under authorisation number CRM 40328 in respect of regulated claims management activities.
We specialise in the complexities of assessing mis-sold pension, SIPP or investment advice, and make claims to IFAs, The Financial Ombudsman Service and the FSCS on behalf of our clients.