In recent years, the pension industry has been hit by a scandal involving Dolphin, a German property group and investment product. The collapse of Dolphin in 2020 put millions of pounds of UK pension money at risk.
In this comprehensive guide, we will delve into the details of the scandal, expose the key companies involved, discuss relevant FOS cases, analyse FCA regulations, and guide you through the process of opening a mis-sold pension claim related to Dolphin. Our mission is to provide you with valuable insights and expert assistance every step of the way.
What Do We Know About Dolphin?
Dolphin, also known as German Property Group (GPG), Dolphin Capital, Dolphin Trust, and Red Rock, borrowed approximately £600 million from pension investors, according to a thorough investigation conducted by the BBC in 2019.
The company primarily focused on redeveloping German listed buildings into luxury apartments, enticing UK investors with the promise of double-digit returns.
Regrettably, Dolphin encountered numerous issues, resulting in investments reaching maturity without the promised returns being paid out. Recognising the potential risks, the Financial Conduct Authority (FCA) issued warnings to GPG investors in 2020, urging them to get in touch with their financial advisers.
Wealthmasters Financial Management, a reputable financial planning firm with offices in Bridgend, Barnsley, and London, currently had 17 open cases at the Financial Ombudsman Service (FOS), as confirmed by FOS reports. Notably, three of these cases are directly related to investments in the unregulated Dolphin Trust.
One of the significant milestones in the scandal was the FOS's ruling in favour of a client who had been advised by Wealthmasters to invest £160,000 (equivalent to approximately 20% of their pension fund) in the Dolphin scheme between 2015 and 2016. In reaching this decision, the FOS highlighted that the FCA had prohibited the promotion of unregulated collective investment schemes, such as the Dolphin investment, to the majority of retail investors in the UK.
Other Companies Involved
Several prominent companies played key roles in the Dolphin pension failures. Greyfriars, Guinness Mahon, Carey Pensions (now Options UK), and Avalon SIPP served as pension funds, while Blackstar, Better Retirement Group, SIPP Club (trading style of BRG), and Wealthmasters acted as investment providers.
Understanding the roles of these entities is essential in untangling the complexities of the mis-selling scandal.
Compensation Eligibility and FCA Regulations
It is crucial to comprehend the compensation eligibility criteria and relevant FCA regulations when seeking recourse for mis-sold Dolphin investments.
The overseas investment scheme GPG, including Dolphin and its associated entities, operates outside the purview of the FCA's authorisation.
Nevertheless, UK customers who invested directly in GPG or through self-invested personal pension schemes (SIPPs) or small self-administered schemes (SAS) may be eligible for compensation.
While the Financial Services Compensation Scheme (FSCS) does not protect this particular type of investment, claims involving regulated companies, such as financial advisers, may still hold merit.
Misleading Offers and Unregulated Introducers
Clients who invested in Dolphin have reported receiving misleading offers, such as the return of their deposits to facilitate SIPP closure and the opportunity to purchase shares in a company named Vordere.
It is imperative to exercise caution and consult a regulated financial adviser before agreeing to any such transactions. This step is vital as your investment could be at risk, and the involvement of a knowledgeable adviser can help you make informed decisions.
Moreover, unregulated introducers played a significant role in promoting pension transfers into SIPPs for the purpose of facilitating investments.
Blackstar, in particular, was aware that these introductions originated from unregulated businesses. Notable schemes often discussed by these introducers included German Property Group GmbH (Dolphin Capital), Harlequin Properties, Best International - Lateral Eco Parks, Colonial Capital Corporate Bonds, Alpha Business Centre (ABC) Bond, and Carduus Housing's unsecured bonds.
Steps to Open a Mis-Sold Pension Claim
If you believe you have been mis-sold a pension investment related to Dolphin, follow these steps to open a claim and seek appropriate compensation:
- Gather Relevant Information: Begin by collecting all documentation related to your pension investment, including contracts, statements, and any communications with financial advisers or SIPP operators.
- Seek Professional Advice: It is highly recommended to consult an experienced claims management company specialising in mis-sold pension claims, such as CP Financials Claims. Their expertise can guide you through the claims process and assess the viability of your claim.
- Submit a Formal Complaint: Prepare a comprehensive complaint letter outlining the mis-selling of your pension investment. Include details such as the advice received, the risks (or lack thereof) explained to you, and any misleading information provided. We take over from here.
- Escalate to the Financial Ombudsman Service (FOS): If the company fails to resolve your complaint satisfactorily, escalate the matter to the FOS. This independent organisation will review your case impartially and provide a fair judgment.
- Explore Legal Action: If the ruling from the FOS does not provide a satisfactory resolution, consider seeking legal advice to explore the possibility of pursuing a legal claim against the responsible parties. Legal action can provide an avenue for further compensation and accountability.
Potential Challenges and Delays in the Claims Process:
While opening a mis-sold pension claim related to Dolphin is essential for seeking compensation, it's crucial to be aware of potential challenges and delays that may arise during the claims process. Sometimes, it isn't all plain sailing.
- Complex Documentation: Mis-sold pension claims often involve a significant amount of paperwork and documentation. It may take time to gather all the necessary records, contracts, statements, and communications related to your investment. Be prepared to invest time and effort into organising and compiling these documents to support your claim effectively.
- Claim Assessment Period: Once you submit your complaint, it may take some time for the claims management company or the relevant authority to assess the merits of your claim. The complexity of the case, the volume of claims being processed, and the availability of resources can all impact the assessment period. Exercise patience during this phase and maintain open communication with the claims management company to stay informed about the progress of your claim.
- Disputes and Investigations: In some cases, the responsible parties may dispute the claims, leading to a more prolonged and complex investigation process. The claims management company may need to gather additional evidence, seek expert opinions, or engage in legal proceedings to resolve disputes. These additional steps can introduce further delays to the resolution of your claim.
- Financial Ombudsman Service (FOS) Backlog: The FOS, being the independent body that reviews escalated complaints, may experience a backlog of cases due to the high volume of claims. This backlog can lead to delays in the resolution of your claim, as the FOS works through its caseload in chronological order. Stay in touch with the FOS and the claims management company to stay informed about the estimated timeline for the resolution of your case.
- Legal Proceedings: If your claim progresses to legal action, the timeline can extend significantly. Legal cases involve various stages, including pre-trial preparations, court proceedings, and potential appeals. These processes can be time-consuming and add further complexity to the resolution of your claim. It's essential to discuss the potential timeline with your legal advisor to set realistic expectations.
Despite these challenges and potential delays, it's crucial not to lose sight of the ultimate goal: seeking compensation for your mis-sold pension investment.
By staying proactive, maintaining regular communication with the claims management company or legal advisor, and being patient throughout the process, you can maximise your chances of a successful outcome.
While Dolphin may not be a scam, it represents an unregulated, high-risk investment that should never have been promoted to retail clients.
Don't hesitate to contact us today for a free no-obligation chat, using the contact form. Let us help you take the first step towards seeking the compensation you deserve.