We have many emails and calls each month from people who have received details of various investments offering big returns.
Usually, the initial offer is via a cold telephone call and is followed up with convincing looking paperwork. Once you show any interest then your name is placed on a “suckers” list and a bombardment of information on schemes ensues. One scheme in particular has come to light, where people are being encouraged to invest in renewable energy. This in itself is not a bad thing as we have many clients invested in wind, solar and anaerobic digestion. However, this particular scheme Elysian Fuels, is a scheme investing in renewable energy projects in the UK and the USA. The main assets are a renewable transport fuels refinery and technical centre in Grimsby. The scheme has attracted more than £240m in investment, the majority from SIPPs. However, the scheme has recently been valued at zero. This means that everyone who invested in it has lost all of their money. Previously we pointed out the risks of investing in foreign property schemes, which, as they are unregulated, pay as much as 15% commission to the ‘adviser’. The largest of these, Harlequin, is still under investigation by the Serious Fraud Office. We had one person contact us who had been advised to transfer out of his Royal Mail pension scheme into this, but thankfully we were able to warn him off just in time. Unfortunately, many of his colleagues were not so lucky and had already invested their pension scheme in this.
If you are offered an investment that promises unexpectedly high returns, please let your adviser check it out for you. In today’s climate of 0.5% interest rates, zero inflation and with the FTSE at a lower level than in 1999, there is no such thing as a big return, or a quick buck.
David Hill is a Chartered Financial Planner and Trust & Estate practitioner at Hills Financial Planning, 15 Agnew Street, Larne. He can be contacted on 028 28276814 or by email: firstname.lastname@example.org