Advisers cost me £170,000 of my pension. Now I’m fighting for justice
Five-year battle of woman risking everything by going to trial
ASINGLE mum is risking every penny she has to sue a pension trustee for breach of trust over an investment that left her r et i r ement f und deci - mated. Five years ago Manita Khuller saw £170,000 stripped from her life savings while a further sum remains frozen and out of reach.
Since then she has filed a case with The Royal Court of Guernsey, home of FNB International Trustees, and visited the court many times.
A conclusion to the case – the first of its kind – is expected to be reached after a trial this autumn.
At a time when protecting pensions from ruin is high on the agenda of UK regulators, Manita shares details of her fight – one she has waged while holding down a job and being a mother.
BAD ADVICE MANITA, now in her 50s, lived in Thailand between 2005 and 2011. Shortly before her return to the UK she was introduced by a neighbour to an adviser who worked for a company called Professional Portfolio International in Bangkok.
He convinced her to transfer two UK final salary pensions into a Qualifying Recognised Overseas Pension Scheme – often referred to as Qrops.
These are popular with expats because of potential tax benefits and the fact it can be an easier way to pass on remaining wealth to relatives after death. They are also a flexible option for workers whose jobs take them overseas.
Manita agreed to transfer her pensions, built from years working as a marketing manager for two multinational conglomerates, into The Plaiderie Pension Scheme. Trustees to the scheme were FNB International.
She believed this to be a secure option because FNB was a subsidiary of South African finance giant FirstRand Bank and was based in Guernsey – trusted for its financial regulation and governance.
From there her money was put into an insurance bond ‘wrapper’ with Royal Skandia and divided between just three funds – all unsuitable and unregulated.
This decision destroyed Manita’s retirement savings. She says more appropriate advice would have been to leave her generous UK pensions untouched.
She adds: ‘ Once your pension leaves the UK it can fall into the hands of cowboys. Back then I did not even know a final salary pension meant an income for life – I was lulled into a false sense of security.’
RISKY INVESTMENTS MANITA is an ordinary investor with a ‘moderate’ appetite for risk. But more than half of her pension money – around £170,000 – was put into LM Managed Performance Fund, run by Australian-based LM Investment Management. It was a risky fund, unregistered with the Australian regulator and invested in a few residential properties on the Gold Coast.
Some advisers had issued warnings about the health of the fund before it collapsed in 2013, dismantling the finances of 4,500 people with more than £200 million invested.
Many of the investors who saw their savings wiped out were British expats like Manita.
Back in 2014, The Mail on Sunday reported on the impact this fund disaster had on investors, when one British couple living in Cyprus spoke out about their financial losses. They were persuaded to invest just days before the fund sank, obliterating their retirement savings.
Many victims had originally declared themselves low-risk investors but their money had still been routed into the fund on the recommendation of overseas advisers. These financial salesmen were UK nationals living abroad and in receipt of generous commissions.
Manita only found out months later that the fund had collapsed, losing her a huge sum. She says: ‘I was in tears. I was dev astated.’
A TRAIL OF WOE THE news set Manita off on ‘a trail and a journey’. What followed was the discovery that her pension pot, worth more than £ 300,000, had been split between three high-risk, unregistered funds designed for sophisticated or professional investors.
A quarter of her money had been invested in the Mansion Student Accommodation fund, where her money remains frozen. She adds: ‘No one with a moderate or low tolerance to investment risk should have had their money put into such funds.’
Then she found out her adviser, Professional Portfolio International, was not licensed in Thailand.
In 2015, The Securities and Exchange Commission, a Thai regulator, filed a criminal complaint with the Economic Crime Police against PPI for operating its business without being licensed.
The company remains on the Commission’s ‘investor alert list’ which warns investors about unlicensed businesses that have been complained about.
Manita says she relied on PPI to make sound decisions on her behalf and on FNB International as trustee to oversee them.
But she now feels the blame has been laid squarely on her shoulders for taking advice and not declaring she did not want unregistered funds in her portfolio.
DAY IN COURT THERE is no official legal recourse for Manita through her adviser because they were not licensed, recommended unregistered funds and are not based in the UK.
But PPI insists it did not act improperly and that a licence was unnecessary for the type of advice being given to expats at that time.
Eric Jordan, boss of PPI, says: ‘Manita Khuller contacted PPI for advice rather than the other way around. I have since co-operated fully with the Economic Crime Suppression Division in its review of