Unregulated Collective Investment Schemes
FCA Warnings and Regulatory Background
The Financial Conduct Authority (FCA) has long warned that UCIS are appropriate only for sophisticated or high-net-worth investors who fully understand the risks involved. In its March 2023 statement, the FCA re-emphasised that these schemes are volatile and illiquid, and reiterated its concern over advisers continuing to promote UCIS to unsuitable clients.
The FCA’s position is clear: UCIS should only make up a small share of a diversified portfolio and only for clients meeting strict qualification criteria. Despite this, we previously assisted clients who were sold UCIS inappropriately—often following advice from IFAs who failed to perform proper risk assessments or explain the speculative nature of the investments.
Undisclosed Commissions and Misrepresentation
Many clients were not told that their financial adviser received a substantial commission or introducer fee from the UCIS provider. These undisclosed commissions created conflicts of interest, leaving advisers unable to act impartially in the client's best interests. In such cases, clients may still have a viable claim even years later, particularly if they only recently became aware of the commission arrangement.
Pension SIPP Investments - Harlequin and Offshore Property Investments
Our team has also represented clients who were advised to encash and invest their gold-plated pension funds or SIPP funds in offshore property-based UCIS, such as Harlequin Properties in the Caribbean and Brazil, as well as projects in Cape Verde, the USA, and Italy. Investors were often advised to exit safe, FCA-regulated pension arrangements and instead invest in unregulated, high-risk foreign property developments. These schemes ultimately failed or underperformed, leaving clients with significant pension losses.
In many of these cases, advisers failed to compare the risks of new investments with existing pension benefits or who inadequately explained the risks involved.
What You Should Do
Even if you invested several years ago, it may still be possible to recover your losses—especially where the adviser failed to disclose a commission or did not adequately explain the risks. FS Litigation can notify your former adviser to preserve any insurance cover and assess the merits of a professional negligence claim.
FS Litigation’s Expertise
FS Litigation remains one of the UK’s leading law firms in professional negligence claims arising out of failed investment schemes. We have successfully recovered multi-million-pound settlements for clients exposed to similar schemes.
We are ranked Band 1 by Chambers & Partners and recognised by The Legal 500 for our high-value financial services and professional negligence litigation.
“Particularly strong in the areas of financial services, pensions and tax schemes” – Legal 500
“FS Litigation is described by some as the only pure financial services litigation firm outside London – its team is the envy of many of the top law firms it comes up against” Legal 500
Our lawyers are regularly quoted by the Financial Times, The Times, and Citywire. We have worked with the BBC and Channel 4 on investigations into mis-sold schemes.
Contact Us
To speak confidentially with a member of our team, please contact us or call us on 0161 714 4520