Retired British couple face losing £380,000 pension pot after unregulated financial adviser invested their money in high-risk schemes

A retired couple say they're living "a nightmare" after entrusting their £380,000 pension pot with an unregulated financial adviser abroad. They complain he invested the money in high-risk schemes, leaving them in danger of losing everything.

The husband and wife, in their 70s and 60s respectively, retired to Spain's Costa del Sol 15 years ago. They looked forward to a comfortable retirement and being able to help out their children and grandchildren. But they told us now they must live on a joint income of just £14,000 a year after the advice they received cost them access to almost their entire nest-egg.

Frank and Eileen, not their real names, retired to Malaga in 2000 after Frank sold the business where he had worked for 40 years.

Admitting to knowing "nothing about finance", the couple turned to fellow Brit Michael Jarrett in the spring of 2005 to help them manage their savings. He would be their sole financial adviser for the next 10 years.

But they hadn't asked whether the man calling himself an independent financial adviser on the website advertising his Malaga-based business, Regency Asset Protection, was regulated to advise in Spain.

Despite what they describe as their cautious attitude, for years Mr Jarrett apparently switched their safe investments into a series of high-risk investment schemes, from second-hand life policies known as ''death bonds'', to recycling and renewables facilities, and Brazilian teak-tree farms.

While he has pocketed an estimated thousands of pounds in commission – our calculations suggest the total may have been around £19,000 – for selling the now- failing investments to Frank and Eileen, they have been left worried for their future. "I had no idea about investing," Frank admitted. "We said to Michael we wanted low-risk funds and to take a 5 per cent redemption from them each year to top up our pensions."

The couple have a fund portfolio that reads like a Who's Who of problem investments – including EEA Life Settlements of which the FCA warned in 2014: "We believe TLPIs are complicated products that are generally unsuitable for the mass retail market – all unregulated, all high-risk, all suspended or suffering liquidity problems. "We are very worried we could still lose a lot of money in these investments," Frank said.

The couple say they had difficulty reaching Mr Jarrett when their investments started going wrong. After they told him they were speaking to the media, and following repeated requests for information, he finally resurfaced.

But he has not responded to The Independent's repeated emailed list of questions and voicemails. "He does not see the point in talking to you. He says what is done is done," Frank told us.

But he did talk further to the couple who say he offered them a "get-out clause" that would mean investing in yet another scheme. Called Global Gateways the waste management company is based in Malaga and claims to be able to remove carbon dioxide from the atmosphere.

Emailing them from a Global Gateways address, Mr Jarrett encouraged Frank and Eileen to sign a non-disclosure agreement. "I am certain the eventual outcome will be to your satisfaction," Mr Jarrett wrote. They declined his offer.

The couple say they have not received any refund of any commission made, and they are now considering selling their family home in the UK to help support themselves.

"We don't owe anybody anything, but we have a granddaughter at university and another two starting in September. It's a shame we can't help them out," Frank said.

He told us that Mr Jarrett is now ignoring his attempts to talk about the investments.

However, the couple's ire isn't just reserved for the adviser. They're also angry at the investment companies that accepted their money through an unregulated adviser to put into schemes that the firms admit are only suitable for very experienced and sophisticated investors.

"The way the [investment] companies have treated us is appalling. Half the time they won't talk to us," Frank said.

The Spanish regulator CNMV handles grievances from people who use investment services in Spain, but not if they have hired unregulated advisers. We asked it to run a detailed search for Regency Asset Protection and Mr Jarrett – it found no record of either.

John Parsons runs the Costa del Sol Action Group, set up in 2001 to help expat victims of unregulated advisers. He said: "The point of financial regulation is to offer protection for private investors. If an adviser is not regulated, there is no comeback. The only means for retribution is the courts, which has had limited success.

"The unregulated adviser usually quickly becomes uncontactable and without visible assets. There has been a growth in advisers that become 'agents' of a regulatory source to enable them to have some legitimacy and to advise. I'm not sure this form of regulation offers full protection for the public."

Details: Costa-action.co.uk.

unregulated advice

nowhere to go