If you have been a victim of pension or investment mis-selling, have lost money and wanted some re-assurance you are not alone then tune into the BBC this evening. Even superstars like Wayne Rooney and Rio Ferdinand, amongst many other high-profile footballers and stars, have been caught out by investment scams. The results have been catastrophic, with some retired players now facing bankruptcy.

What Has Happened?

Former footballers and other individuals who have been targeted, have lost a combined total of around £100 million after being persuaded to invest in schemes that turned out to be fraudulent. These investments were often presented as safe, high-return opportunities, but the money was put into risky and unsuitable products. When the expected returns never materialised, the fraud collapsed, leaving victims devastated.

Why Did the Investments Fail?

The schemes usually fall apart when investors realise there is no real way to generate the returns they had been promised. As with other high-profile scandals, the moment confidence is lost, the structure collapses and the scale of the losses become abundantly clear.

Why Did Regulators Step In?

The Financial Conduct Authority has been criticised for not acting sooner, as similar situations in the past have shown how poorly regulated or unregulated products such as crypto scams or investment scams can be sold under the guise of safe investments. The FCA’s role is to protect consumers, but cases like this highlight serious gaps in oversight when high-risk products are marketed to unsuspecting clients.

How Can Investors Get Their Money Back?

So far, recovery has been limited. Some victims have received small amounts of compensation through the Financial Services Compensation Scheme, but with this capped at between £50,000 and £85,000 in total it is often only a fraction of what they originally invested let alone interest that may have been lost had the money been safely parked in an existing pension or ISA.

Some investors are pursuing legal action or complaints through the Financial Ombudsman Service. Sadly, unless there is a trading financial adviser involved with adequate professional indemnity insurance, it is unlikely that most victims will ever recover their full losses.

Even in those circumstances, often High Net Worth investors like footballers are convinced to sign waivers, certifying themselves as high net worth investors which can mean they are not protected by the FSCS or the FCA.

Unsuitable Assets Involved

While the footballer case has not yet named specific assets, they appear to have been high-risk, illiquid, or unsuitable investments like The Resort Group, Store First or, Woodford Equity Income Fund which collapsed after investing heavily in companies like Benevolent AI, Industrial Heat, and Proton Partners, assets that effectively met similar criteria to the investments footballers may have bene convinced to invest in directly.

What Can Victims Do Now?

Victims have several options:

• Automatic payouts wait to see what may come back from the investment.
• Complaints to advisers if a financial adviser was involved in the process and the risks were not explained properly.
• Financial Ombudsman Service if the adviser rejects your complaint and you want an impartial opinion with the powers to enforce action.
• Financial Services Compensation Scheme if the adviser has gone out of business (limited to £50,000 to £85,000 per claim).
• Legal claims, also known as litigation. This is sometimes done as a group action against those responsible however for claims over £10,000 you must take measures to protect yourself against costs should your claim not be upheld.

Implications for Investors

This case is another reminder that even famous sports stars, with all the support systems around them to help protect their wealth, are still able to be tricked into parting with their money. Unlike most of our clients they may not always be protected in the same way as ordinary retail investors meaning the same risks apply to them, but with fewer safeguards.

Our Thoughts

While these high-profile examples grab headlines, the reality is that many everyday clients of large financial advice firms such as St James’s Place or True Potential Wealth Management may also have suffered losses without realising it. In many cases, investments may still have gone up in value, but when compared against what should have been achieved, the cumulative shortfall can be significant.

That is why we built our Financial Adviser Redress Calculator. It helps you work out whether you may have a claim for compensation, even if your pension or investment appears to have grown.

If you are worried that you may have lost out due to bad advice or unsuitable investments, you are not alone. Use our Financial Adviser Redress Calculator or if you have questions about a potential claim, why not book a free no-obligation consultation with one of our financial services claims experts today and find out if you may be eligible for financial redress or compensation.