There is a simple rule in investment matters, “if you can’t understand it, don’t invest in it”.
It is why transparency matters, if you can’t see what is going on- don’t go there.
The news is that thousands of self invested personal pensions could be investigated for “‘non-mainstream investments’, which tend to be more exotic, higher risk, often unregulated projects“.
If anyone is any doubt about the relevance of this topic, follow this link to see how the FCA is starting civil proceedings in relation to alleged misleading statements on pension investments.
This is the investment strategy that was being suggested for a man with a £200,000 CETV.
The portfolio construction algorithm is based on empirical research and up-to-date portfolio management techniques. We use technology to do the heavy lifting: the systems we have created enable us to make qualitative and quantitative assessments of 1,000s of securities every day. The result is an intelligently diversified portfolio with the greatest potential for return for a given risk profile.
You can be sure that the human biases of fear and greed, proven to be detrimental to long terms returns, do not play a role in how your investments are managed. Instead, every investment decision made is free of emotion and consistent with a growing body of investment and risk management research that spans decades.
The man was introduced to Darren Reynolds of Active Wealth by Celtic Wealth and planned to use Intelligent Money to invest in Vega Capital which is an appointed representative of fund administrator Gallium. As the investor pointed out on a private Facebook page
this may be normal but I have no clue.
The journey of the £200,000 would have incurred an introductory fee to Celtic, Darren Reynold’s advisory fees, the wrapper fee for the Intelligent Money Sipp, the investment management fees from Vega and the administration fees of Gallium. On top of this would have been the transaction costs involved with the “Vega Algorithms”.
As almost all of this money would have been paid out of the £200,000, the investor would have got all of this for free – he would not have had to reach for his pen to sign a cheque or open his wallet.
Thankfully the FCA are now on top of this situation, Active Wealth has a restriction on it contacting its clients and cannot take new clients.
But we know that money has reached Vega because former BSPS members show us.
Fees are one thing, but they are only part of the harm that come to an investment. There is a more fundamental problem- competence. Vega Capital is run by these two chaps;
Both were former RBS bankers .
Steffen’s linked in CV suggests he left RBS to set up Vegas. But we know better.
Steffen actually set up another investment company before setting up Vega in March 2017.
That company was called Strand Capital.
Just why Steffen forgot his time at Strand is a mystery, but clearly it should be of interest to investors in Vega Capital and indeed savers into myworkplacepension.com/ an auto-enrolment master trust that invested in Stand Capital’s funds.
It would seem that Vega Capital is a Phoenix of Strand. I’m grateful to the website of My Workplace Pension (known to BBC viewers as wideboys r’ us) and to Steffen’s Linked in page for these two quotes. Note the date in the URL for my workplace pension-no mention of this on Linked-in.
A lot of coincidences
Now of course none of this is proof of anything dodgy. It might just be an awful lot of bad luck that’s befallen those at Active Wealth/Strand Capital/Myworkplacepension all to be caught up in insolvencies or shut down. Similarly the problems at Celtic Wealth and Gallium detailed previously on this blog, may just be an unfortunate coincidence,
But if you are a regulator, or a fiduciary and your job is to protect people from getting into financial deep-water, you’ve got to start somewhere. So perhaps they could start here.