Have a question? Like to know more? - Contact us or Call +44-1865 292200 or +44-20 7436 4773, Mon-Fri 8:15am - 5:15pm
Have a question? Like to know more? - Contact us or Call +44-1865 292200 or +44-20 7436 4773, Mon-Fri 8:15am - 5:15pm
2 minute read
Recent press has been pretty vocal on the demise of London Capital & Finance who, having taken in c£263m from investors, went into administration with the potential loss of most of that money.
LC&F marketed a series of ‘asset-backed bonds’ promising returns of between 3.9% for 12 month and 8% per annum over three years. They claimed the investments were eligible to hold within an ISA, that they had a 100% track record in paying back the capital and interest and that there were no set up costs, management fees or charges. So what went wrong?
Looking at the marketing, there are a number of things that should have rung alarm bells.
As far back as 2015, an Independent Financial Adviser had raised concerns about the marketing of this product with the regulator, the Financial Conduct Authority. According to their later comments, it appears that LC&F were never authorised to sell bond or ISA products. Yet it wasn’t until December last year that the FCA took action against LC&F and in January this year the company went into administration. A large chunk of the money by that point had been borrowed by the founder of LC&F for other projects of his.
Another sorry tale of misled investors, life savings destroyed and a failure by authorities to prevent the disaster. What we learn from this is what we have learned from previous problems :
If in any doubt, ask an expert, as a client of the IFA mentioned above did in 2015, much to his relief