One of my relatives is caught up in this. It doesn’t sound promising and he is very worried. He asked me to look at his paperwork and one question occurs to me regarding a potential conflict of interest.
My relative, who was in his mid 60s at the time and in poor health (see below), initially approached a financial advisor that had been recommended to him to advise him about where to put/invest a €250k lump sum he had received from a policy after being diagnosed with a critical illness (thankfully he is still alive after a difficult diagnosis but the battle continues). My relative’s pension is small and he said he told the financial advisor he wanted some level of investment return on the €250k, rather than just sticking it into a bank account. The financial advisor suggested this is a potential option - I am not sure if any other options were discussed, but I asked whether the financial advisor discussed lower risk options like putting it in cash, bonds, even equities, but my relative doesn’t think so. I asked my relative if the financial advisor made it clear at the time that it was a high risk, high reward investment, and my relative said that the financial advisor said it was as risky as any other investment, he could make money or lose money, but nothing out of the ordinary. My relative said he signed all the documents and completed all the questionnaires etc which assess your risk appetite.
What I found interesting is that the founder of the financial advisory firm that my relative received advice from, is the CEO and co-founder of the company behind this project. My relative did not know this and no one told him.
I obviously have sympathy for my relative but at the same time it could be argued that he simply took a punt and it hasn’t come off.
But I’m wondering, could he possibly have a case for mis-selling of a financial product? As stated, he was in his mid-60s, in demonstrably poor health, with little or no other income, a small pension, and his financial advisor suggests this high-risk investment as an option, without explaining that the CEO of the company behind the investment is the financial advisor’s boss!
I’m just wondering if it’s worth talking to a lawyer about this - there is a law firm saying that they are acting for some investors. I wonder if they would take such a case, no foal, no fee, as my relative wouldn’t have the money to fund such a case.
Or do people think it would be a waste of time?
Thanks.