Have your clients fallen prey to these scams?

You can’t be with clients all the time, so Rachel Dalton takes a look at some of the more questionable financial schemes you can warn them about in advance.

As clients become more financially savvy, cons to trick them out of their money are becoming more sophisticated.

Some advisers say clients have not only been approached by scammers, but that they have even been told not to consult with their IFA about schemes as “advisers would not understand them”.

When faced with a new client, there is a possibility they might have been approached about one of these four swindles.

PRPs

Advisers report some of their clients have been approached by shady characters pushing pension reciprocation plans (PRPs), and some have even offered investors commission if they introduce others to the schemes.

PRPs work by transferring investors’ pensions into an offshore vehicle. They are then lent the value of their pension from a parallel pension vehicle after a hefty fee is deducted for the seller. Often these loans are charged at high rates of interest, and investors are forced to put some or all of their money into highly illiquid, unregulated products.

Gold dust

The past two years have seen cash-for-gold businesses pop up like mushrooms as investors flocked to gold as a safe haven.

However, some advisers’ clients have been cold-called and offered direct investment in literal gold dust; the industrial waste product created by gold production.

Touted as a cheaper way to access the asset class, the quality of the gold invariably turns out to be poor.

Land banking

Perhaps thinking of Mark Twain’s wisdom to buy land because noone is making it any more, thousands of people have been duped by land banking scams.

These are straightforward mis-selling scams. Brokers sell stakes in worthless plots of land, claiming will turn investors into millionaires.

This summer, the High Court ordered the closure of six land banking companies after an investigation by the Insolvency Service.

Football betting

Some advisers have reported clients being approached by investment vehicles apparently based on football results.

Companies claim they have worked out how to ensure steady growth of an investment by continually betting on draws in football matches.