Monthly Archives: April 2015

No Hope for Fair Investigation after Investor Gets Scammed by Regulatory Chairman’s Company

Johnson Chow

Johnson Chow, Chairman of PIBA and CEO of Centaline

The Professional Insurance Brokers Association (PIBA) is a group of Hong Kong brokers who’ve been entrusted with the responsibility of “self-regulating” themselves since 1995. Johnson Chow (周忠信), the CEO of Centaline Financial Services, is the current chairman.

PIBA’s Code of Conduct requires members to act in the best interests of their clients. However, most PIBA members, including Centaline, blatantly disregard this regulation.

For years, these members have been flogging investment-linked assurance schemes (ILAS) embedded with indemnified commissions. These indemnity products have been outlawed in many developed countries and were recently banned in Hong Kong. One local expert describes the products as financially toxic, and another says they are scams.

Whenever a Hong Kong consumer has been scammed by a PIBA member, the consumer has no independent regulator to turn to. If he or she files a complaint, the complaint must go to PIBA. 


Since PIBA exists “to serve and to protect” the interests of its members, consumers have virtually no chance of their cases being handled in a fair, impartial, and just manner.

Scammers are always safe, while victims are always screwed.

The Story of a Centaline Victim

Yip is a young Hong Konger who works as an auditor at a bank. In early 2014, he was assigned a task that required him to do research on the regulation of ILAS.

As he was studying, he realized that he had been mis-sold an ILAS by a friend and former colleague, Melanie, who worked at Centaline Financial Services—Johnson Chow’s company.

Centaline Financial Services

Melanie had breached several industry regulations, including one that prohibited selling ILAS to investors who have no insurance needs.

By the time Yip figured out that he was screwed, he had already contributed $12,000 HKD per month for 12 months—$148,000 in total—to an ILAS with a 25 year payment term. If he stopped making payments, his policy would be automatically terminated and charged with an 86% exit penalty. He’d only get roughly $20,000 of his money back.

The remaining $128,000 would be pocketed by Melanie, Centaline, and the insurance company that designed the ILAS, Standard Life.

Yip later learned that Standard Life had paid his friend, Melanie, and her company, Centaline, a secret upfront indemnified commission of $165,600 for luring him into the policy.

Standard Life Logo

Due to its extraordinary size, Standard Life’s secret payment likely violated Hong Kong’s anti-bribery laws. An offense is punishable by up to 7 years imprisonment.

“I Don’t Sell, I Advise—Provide Valuable Advice La!”

In early 2013, shortly after Melanie had been hired by Centaline, she and Yip chatted about the nature of her new job. She said it involved giving people investment advice about “bonds, stocks, commodities, etc”. She did not mention insurance:

Screenshot 1 (redacted)

When Yip later playfully suggested that she was a salesperson, Melanie strongly denied it, insisting that she was an adviser:

Screenshot 4 (redacted)

In fact, Melanie was neither qualified nor licensed to give investment advice. She only held a license to sell insurance policies.

Nevertheless, from February to July of 2013, she sent Yip numerous WhatsApp messages offering advice on stocks, bonds, and mutual funds, trying to convince him that she was knowledgeable about investments and that he should become her client.

By pretending to work as an investment adviser, Melanie was likely committing an offense contrary to Section 114 of the Securities and Futures Ordinance. Yip has since filed a complaint with the SFC.

What Melanie really aimed to do, as opposed to giving “valuable” investment advice, was to earn a massive commission by selling Yip an ILAS policy.

Yip now says:

“Had I known that Melanie was not a SFC licensed advisor and that her advice to me was biased toward insurance products (since she could not sell any investment products)…I would not have purchased anything from her.”

A few weeks after the mis-sale, Melanie claimed in a Whatsapp conversation that she held an SFC license:

Screenshot 13 (redacted)

Melanie eventually obtained an SFC license, but SFC records show that she did not yet have one when the above conversation took place.

A $50 Million Dollar Plan

Melanie told Yip that her team of colleagues at Centaline had helped several clients “win” a lot of money, and she wanted to help him too, “as a friend”.

Yip finally agreed to meet her on 17 July 2013 at a restaurant to discuss her services. She brought a document labeled, “Financial Analysis”, which is shown below:

15 Percent Returns Over 25 Years (3)

Although she only had a few months of training as an insurance broker (and no SFC license), she was confident that she could help Yip pick investment funds that would earn an average of 15% annual returns—after deducting all fees—over the next 25 years. She predicted his savings would grow into nearly $50 million HK dollars.

Her rate of return assumptions were more than double the historical average. According to the research of Wharton Professor, Jeremy Siegel, stocks have averaged only 6.5% to 7% annual returns after inflation over the past 200 years. As a whole, actively managed funds, such as Melanie was promoting, necessarily underperform the stock market average, a phenomenon which is explained by Stanford Professor, William Sharpe, in his essay, “The Arithmetic of Active Management“.

When active funds are wrapped in an ILAS policy, the multiple layers of additional high fees put a further, very significant drag on returns.

Melanie’s promise of consistent far-above-average returns were therefore unrealistic and seriously inappropriate. She maybe did not realize this, since she was inexperienced, unqualified, and unlicensed to give investment advice.

A Plan to Extract Maximum Commission

Melanie’s “Financial Analysis” (shown above) projected exactly 25 years into the future. This was probably not a coincidence.

Most ILAS savings plans have a payment term ranging from 5 to 25 years. Although the same amount of work is required to sell policies with different payment terms, insurance companies secretly pay 500% more upfront commission to brokers when they convince victims to sign on for 25 years, as opposed to 5.

Insurance companies immediately recoup this commission by pocketing their victims’ first 18 months of savings (sometimes more).  Victims never know what hit them. Their policy’s account value shows that they are earning big profits, when in fact, all of their savings has disappeared. (More info HERE.)

The Broker’s Financial Needs

At their meeting, Melanie gave Yip a financial needs analysis (FNA) form.  In theory, this form is used to determine which, if any, financial products are “needed” by a client.  In practice, it is used to deceive clients into thinking they “need” whichever ripoff product the broker wants to sell. This is exactly how Melanie used it.

The questions in Section 1 were aimed at determining how much money Yip had, i.e., how much money Melanie and Centaline could get their hands on.

The final part of Section 1 was labeled “Recommendations and Reasons for Recommendations”. Melanie left this area blank:

FNA Section 1 (Recommendations and Reasons for Recommendations) - N.A.

She later filled it out sometime after Yip had signed all the forms. In the blank space, Melanie wrote: “Saving plan is recommended for wealth accumulation“. 

She could have added that it was a savings plan recommended for her wealth accumulation, not Yip’s.

FNA Section 1 (Recommendation and Reasons for Recommendations) - Filled Out

After Yip answered the questions in Section 1, Melanie immediately handed him Section 2, which was labeled, “Only Applicable to Investment-Linked Policy”.  She never explained why investing in funds through an insurance policy was preferable to the much cheaper and more flexible option of investing in ETFs or using a regular fund platform like Fundsupermart.

FNA Section 2 (Only Applicable to Investment-Linked Policy)

Section 2 contained a question which asked, “What is your target horizon for insurance policy / investment linked assurance scheme?”  It contained another question which asked, “For how long are you able to contribute to an insurance policy and/or investment plan?”  

For both questions, Melanie told Yip he should tick 20+ years so he could “get the maximum bonus”, meaning his account would be credited with extra “free” fund units.

What is your target horizon for investment-linked policy

For how long are you able to contribute to an investment plan

Melanie did not disclose that a 20+ year policy would earn her the maximum upfront commission. She also did not explain that the bonus was deceptive and imaginary, since the “free” fund units would be taken back by fees.

When Yip agreed to ticking 20+ years, he says he had no desire to be “locked up” in an ILAS for that period of time.  He thought he was just indicating that he planned to invest for 20 years or more, like anyone else his age.  Neither Melanie nor the FNA form had mentioned a 20+ year lock-in.  

The next part of the FNA was labeled “Risk Profile Questionnaire (RPQ)”.

Risk Profile Questionnaire (underlined)

The RPQ stated that no product should be recommended before the questionnaire was completed. However, an ILAS had already been recommended, as the entire form was labeled “for ILAS only”, which meant that the RPQ was inherently flawed and self-contradictory.

Additionally, the RPQ began with a loaded question, asking, “What are your purposes of buying insurance product?”  Yip had no intent at this point to buy an insurance product or any product, even though the form was telling him that he did.  He was under the impression that his financial needs were being analyzed.

Yip ticked that his “purposes of buying insurance product” were Savings and Investment. He did not tick any option, such as Life Protection, which would have justified his buying an insurance policy.

What are your purposes of buying insurnace product - Savings and Investment

Over the past several years, four different Hong Kong regulators—SFC, HKMA, HKFI, and OCI—have all issued circulars stating that ILAS policies are not suitable and should not be recommended to investors who have no insurance needs. Unless all of those regulators were mistaken, Melanie should not have recommended an ILAS to Yip.

The Harvest Wealth Investment Scam

Based on her “analysis” of Yip’s financial needs, Melanie concluded that he should purchase a 25-year Harvest Wealth Investment Plan.

Harvest Wealth Investmnet Plan Brochure Cover

For a “limited time only”, Standard Life was offering free fund units equivalent to 62.5% of all contributions paid during the first 18 months of the plan. These “free” units would make the account value show an instant 62.5% profit.

In the coming days, Melanie would pressure Yip to hurry before the offer expired:

Not much time left if you want to have the bonus (redacted)

She did not explain the fraudulent nature of the “bonus”, possibly because she did not understand it herself.

Cheaper than Buying Stocks!

Yip had some experience buying stocks and bonds, but he had never invested in mutual funds and had never heard of ILAS.

According to Melanie, ILAS was a “great bargain” because it allowed free switching of mutual funds. She told him that he would save money on transaction costs if he stopped buying stocks directly and instead bought stocks indirectly via mutual funds in an ILAS. 

She was wrong. Yip could not possibly save money by paying additional fees to her, Centaline, Standard Life, and various active fund managers—fund managers who incur their own stock trading fees which would then be passed on to Yip. 

Nevertheless, Melanie gave Yip a flawed and misleading fee comparison allegedly showing how he would save over 40% in fees if he switched funds every single day of the year:

Melanie's Fee Comparison (cropped)

She never explained why it made sense to actively trade fund managers when the fund managers were being well-paid to actively trade for him.

Nor did she mention that regular fund platforms allow free fund switching at a tiny fraction of the cost of ILAS. For example, Standard Life’s upfront fees were more than 600 times higher than iFAST Central’s.

My Client Earned 18% in One Month Investing in Super Safe Stuff!

Several days after Melanie recommended the ILAS, before Yip had made a decision about whether to follow her advice, she sent him a Whatsapp message boasting about having helped another client earn 18% in one month, “net of all charges”, investing in “super safe stuff”:

Whatsapp - 18 Percent Return in One Month

She showed him a snapshot of her client’s account statement to “prove” that she was telling the truth:

Whatsapp - 18 Percent Return Account Statement -Redacted - Highlighted

The account statement showed the returns of a few funds. One fund had gone up by 3%, another by 6%, and only one had gone up by 18%. It wasn’t clear whether it had gone up 18% in one month or in one year (probably the latter).

The fund that earned 18% was a biotechnology fund—far from “super safe”.

“All of Our Clients Earn Annual Fees Back in a Few Days!”

When Yip expressed concern about the ILAS policy’s high fees, Melanie sent him the following WhatsApp message:

All out clients earn annual fees back in a few days (redacted)

Yip’s first ILAS payment would be $12,000.  Melanie claimed that he would earn back the annual fees in just a few days. If that were true, he’d need to get a return of 1,380% just to recoup Centaline’s secret $165,600 commission.

Suggesting that anyone could earn so much money so quickly is utterly preposterous, so presumably Melanie did not mean that Yip could earn back Centaline’s commission in a few days. Instead, she probably meant that he could earn back the ILAS fees of over 6% per year. If so, then Yip would need to earn at least 2% per day in order to recoup 6% “in a few days”.

Melanie spoke as if this were guaranteed. If so, then “all of her clients” would be earning about 730% per year (2% per day x 365 days per year), which is also preposterous. Perhaps this is why Melanie encouraged Yip not to “focus on the fees”.

She told him to instead focus on “what really mattered”, i.e., her investment advice. She failed to mention that was not licensed to give investment advice.

“We Are Remunerated for Providing Long Term Advice”

The day after Melanie sent the above WhatsApp message, she sent Yip an email in which she elaborated even further on the fees that her company collected. She claimed:

“This is a long term relationship and our remuneration is structured that way to provide incentive too. Unlike insurance agents, we are not agents. We are consultants and are remunerated for providing long term advice. We have the incentive to provide good advice as we will receive a % of your account value. Rest assured that, it won’t deduct from your investment income. Standard Life shares their fee income with us. The only expense you need to pay for is the platform fee to Standard Life. NO advisory fee to us, NO fund fee to fund houses. Standard Life will share with us.”

The entire paragraph was loaded with lies, misrepresentations, and contradictions. Standard Life did not just share fees, it advanced the fees in a form akin to bribery. The remuneration structure was designed to incentive high pressure sales tactics, not a long-term relationship or good advice. Melanie and Centaline would keep Yip’s money whether or not they provided the 25 years of service they were secretly paid for in advance.

Melanie Quit Her Job Within Months of Pocketing 25 Years’ Worth of Fees

All of Melanie’s lies and unrealistic forecasts eventually had the desired effect on Yip. She convinced him to sign the paperwork for a 25-year ILAS.

Standard Life immediately paid her and her company a $165,600 commission. Standard Life would recoup this commission by deceptively pocketing Yip’s next 18 months of payments.

Although Melanie had been pre-paid for 25 years of work, she had no obligation to return the money if she did not finish the job. As long as Yip made payments for 18 months, she’d face no clawback. If she wanted to, she could take Yip’s money and run, which is exactly what she did.

She quit her job at Centaline less than a year after selling Yip a “long term relationship”.

Yip claims that the funds Melanie recommended dropped in value by about 15%, precisely the opposite of the 15% annual profits she had predicted.

“Too Stubborn to Get It”

In early 2014, after studying ILAS regulations for his banking job, Yip realized that he had been mis-sold. He immediately confronted Melanie:

You did not tell me it was insurance product (redacted)

Although Melanie claimed that she told Yip that ILAS was an insurance product, in her email correspondence, she exclusively referred to it as a “platform” for investing in funds.

Perhaps realizing that Yip’s allegations were true, she defended herself by saying that ILAS was an insurance product that “has no insurance protection”:

It is insurance but has no insurance protection (redacted)

After Yip pointed out that the regulations forbid her from selling ILAS to him, given that he had no insurance needs, Melanie claimed that, from her “professional perspective”, Yip did in fact have insurance needs, but he was “too stubborn to get it”, suggesting that it was ok for her to misrepresent the insurance element of the policy, since this was the most efficient way to convince Yip to buy what he allegedly “needed”:

Whatsapp - You Have Insurance Needs (redacted)

No Evidence of Mis-Selling Or Negligent Conduct

Over the next few months, Yip did a lot more research on ILAS and considered his options. By summer, he decided he had no choice but to stop contributions, file a complaint, and demand a refund. On 12 August, Yip met with representatives from Centaline to explain how he had been mis-sold and why he deserved a refund.

Three weeks later, Centaline sent him a short reply:

“After truly reviewed all the documents, considered all the information, and contacted with Ms. Melanie for her confessions, we concluded that there is no evidence showing that Ms. Melanie, our ex-Consultant had mis-selling practices or any negligent conduct. Ms. Melanie performed her duty in compliance with our internal policies and statutory requirement. If there is no additional information, no action will be taken for this issue.”

Yip was angry that Centaline, without explanation, had disregarded all the evidence he had provided. He demanded a better response.  After more phone calls and another meeting, Yip finally received a more detailed reply letter from Centaline’s compliance officer, Lomax Wong. 

Unfortunately, Lomax’s letter was deeply unsatisfactory. It contained multiple factual errors, misquoted the regulations, and continued to ignore some of Yip’s points.

The letter’s main takeaway was that Melanie’s conduct was irrelevant.  Even if some of the things she said were blatantly false, misleading, and unreasonable, Centaline would never give back his money. The company would forever point to the fact that Melanie conned him into signing a statement saying that he agreed that the ILAS was suitable for him. It did not matter that his belief was based on Melanie’s lies and misrepresentations.

Yip Contacts Johnson Chow

On 26 September, Yip sent the following email to Centaline’s CEO, Johnson Chow:


By way of introduction, I am a customer who purchased the ILAS policy from Centaline last year in July, in which I believe I was mis-sold by your Company. Accordingly, I reported my complaint to Lomax Wong in August 2014.

The reason why I am writing this email to you is because Lomax Wong has not been handling my complaint in a fair manner and he also appears to be not familiar with the regulation.

As you are the CEO of Centaline and also the Chairman of PIBA, I believe you would be very familiar with the regulation and would look at my case in an objective and fair manner, and therefore I would like to discuss my complaint with you directly to seek your views. Attached are my letter to Lomax Wong, and his reply letter to me.

Can you please suggest a time to meet and I can discuss with you my case directly



To Yip’s surprise, Chow agreed to a meeting on Oct. 6.  Lindell Lucy, author of this blog, was present at that meeting.

Johnson Chow: “Even if the sales process breached the regulation, so what? Maybe get penalized by PIBA? It’s ok.”

At the beginning of the meeting, before any discussion had taken place, Chow immediately told Yip that he would not refund his money.  He then refused to speak in English, apparently in an attempt to silence Lindell, who had been outspoken in a previous meeting with Lomax Wong.

The whole meeting with Chow lasted almost an hour, but Yip summarized it in five key points in a letter which he cc’d to the Office of the Insurance Commissioner a few weeks later:

Letter to Centaline (Oct 27, 2014) p1-2

“Garble Statements”

On 3 November, Lomax replied to Yip’s letter, stating:

“We do not agree with the points stated in your letters as we believe that they were all garble statements with incomplete information. We will not confirm the information stated in those letters.

Based on the information we have found, as well as the evidences after meetings with you, we believe that we had already done our best to solve your inquiries.”

Chow has welcomed Yip to file a complaint with PIBA if he is unsatisfied with Centaline’s decision.

Seeking a Viable Route to Justice

Yip does not believe that PIBA would fine Centaline, since PIBA is headed by Chow. Even if PIBA did fine Centaline, Chow has already stated that he does not care. He will just pay the fine and keep Yip’s money.

Consequently, Yip has had to explore other ways to pressure Centaline to give back his money.

Securities and Futures Commission (SFC)

Yip believes that Melanie and Centaline have broken some of the laws contained in the Securities and Futures Ordinance (SFO), not just in their dealings with him, but in their dealings with other clients as well.  Yip has written to the SFC, shared his information, and has asked for an investigation.  In one of his letters, he says:

“I understand that SFC does not have the legal power nor can SFC arbitrate a dispute between an investor and a third party. However, I do believe that SFC has the power as a regulator to influence the captioned entities to do the right thing for the public’s interest. In substance, the ridiculously high commissions earned by Centaline Financial Services Limited are the hard-earned saving of its customers, and it got its customers into purchasing ILAS by violating the SFO. I hope that SFC will utilize such power, shall SFC conclude that the captioned entities indeed violate the SFO, to remediate the damages that they had done to the public.”

Office of the Commissioner of Insurance (OCI)

Yip has also filed a complaint with OCI against Standard Life. Yip argues that Standard Life obtained his money by breaching the industry’s Code of Conduct.

In a letter to the Insurance Commissioner, Annie Choi, Yip has said:

“The HKFI Code of Conduct [Section 44 and 45] requires Standard Life to conduct its affairs “honestly and fairly and in a manner consistent with the public’s interests” and “should seek to promote and enhance (and should not damage) the insurance industry’s reputation and standing as a responsible service provider and good corporate citizen”…

In its letter [to me], Standard Life did not even attempt to explain why its product and remuneration structure were considered fair and consistent with my best interests. Obviously, the remuneration structure only served Standard Life’s and Centaline’s interest.

If all the regulators in HK agree that ILAS should be sold to someone who has insurance needs, I would expect that any ethical company that is fair and concerned about customers’ interests would accept a refund request from a mis-sold customer. Standard Life is absolutely not complying with HKFI’s Code of Conduct in this regard. I believe it is concerned about its own interest in retaining profit, rather than the public’s interest.”

Independent Insurance Authority (IIA)

When the IIA is established within the next few years, ILAS victims will be able to file complaints with it, rather than self-regulatory organizations like PIBA.

Officials from OCI have told Yip that the IIA will not investigate cases that PIBA has already closed. For this reason, Yip has instructed both OCI and SFC to not refer his case to PIBA. He wants to wait to send his complaint to IIA—even if that means waiting three years—so that Chow and PIBA do not get a chance to screw him.

The Media

So far, SFC and OCI have allowed Centaline and Standard Life to go unpunished for scamming Yip and thousands of other Hong Kongers.  Yip is justifiably outraged, and he is sharing his story with any news organization that is willing to listen. He hopes that media coverage will shame Centaline, Standard Life, and the regulators to do the right thing. Journalists who wish to speak with Yip may contact Lindell at

Yip’s Documents

Below are copies of all Yip’s ILAS documents. Some of his personal information has been redacted.

Financial Needs Analysis (FNA)

Important Facts Statement (IFS) and Declarations

Harvest Wealth Investment Plan – Brochure

A pdf copy of the September 2012 version of the brochure can be downloaded by clicking HERE. This is the version that was given to Yip.

Melanie’s Explanation of ILAS, Centaline’s Services, and Related Fees

Melanie’s Email about Dollar Cost Averaging

Example Fund Switching Confirmation

Harvest Wealth Investment Plan – Application Form

Illustration Document

Email from Melanie Asking Him to Print and Sign the Illustration Document

Cooling Off Notice

Yip’s Letters

Below are copies of letters that Yip has sent and received from Centaline, Standard Life, SFC, HKFI, and OCI.

Early Emails with Centaline and Standard Life (Aug. 9 – Sept. 10, 2014)

Centaline to Yip (Sept. 2, 2014)

Centaline to Yip (Sept. 10, 2014)

Yip to Centaline (Sept. 15, 2014)

Centaline Compliance Officer, Lomax Wong to Yip (Sept. 24, 2014)

In Point 1 of his letter, Lomax misquoted HKFI regulations, leaving out the words, “as in (b) above”, perhaps in an attempt to conceal what he believed to be a blatant regulatory violation. Here is a screenshot of the regulations:

Yip to Centaline CEO, Johnson Chow (Sept. 26, 2014)

Yip to Centaline CEO, Johnson Chow (Oct. 7, 2014)

Yip to Centaline (Oct. 27, 2014)

Centaline to Yip (Nov. 3, 2014)

Yip to Centaline (Nov. 7, 2014)

Yip to Centaline (Nov. 11, 2014)

Yip to Centaline (Dec. 2, 2014)

Centaline to Yip (Dec. 5, 2014)

Yip to SFC (Dec. 15, 2014)


[This letter has been temporarily removed as of May 3, 2015.]


SFC to Yip (Dec. 24, 2015)

Yip to SFC (Dec. 31, 2014)

[This letter has been temporarily removed as of May 3, 2015.]


SFC to Yip (Jan. 23, 2015)

Yip to SFC (Jan. 30, 2015)


[This letter has been temporarily removed as of May 3, 2015.]


Correspondence with HKFI (Nov. 19 & Dec. 11, 2014)

Correspondence with HKFI (Feb. 6 & March 4, 2015)

Yip to Standard Life (Sept. 9, 2014)

Standard Life to Yip (Sept. 12, 2014)

Yip to Standard Life (Sept. 15, 2014)

Standard Life to Yip (Sept. 19, 2014)

Yip to Standard Life (Sept. 22, 2014)

Standard Life to Yip (Oct. 30, 2014)

Yip to OCI (Nov. 13, 2014)

OCI to Yip (Nov. 20, 2014)

Standard Life to Yip (Dec. 19, 2014)

Yip to OCI (Dec. 20, 2014)

Standard Life to Yip (Dec. 30, 2014)

OCI to Yip (Jan 2, 2015)

Yip to OCI (Jan 2, 2015)

OCI to Yip (Jan 9, 2015)

Yip to Standard Life (Jan 12, 2015)

OCI to Yip (Jan. 16, 2015)

Yip to Standard Life (Jan. 29th, 2015)

Standard Life to Yip (Jan 29, 2015)

Standard Life to Yip (Jan 30, 2015)

Standard Life to Yip (Feb. 6th, 2015)

Attachment 1 – HKFI Updated Requirements wef 1 Jul 2013

Attachment 2 – HKFI Updated Requirements wef 1 Jul 2013 – AppendixA

Attachment 5 – Pamphlet – Questions you need to ask before taking out an ILAS product

Attachment 6 – KFS

Standard Life maintains that Melanie’s ILAS recommendation to Yip was compliant with the HKFI regulations in effect at the time. Those regulations stated:

“If the [financial needs] analysis result indicates that the potential customer has investment needs and his/her personal and financial circumstances may be suitable for investing ILAS product(s), then insurance intermediary may propose the potential customer to consider suitable ILAS product(s).”

As early as 2009, various Hong Kong regulators have issued circulars stating that ILAS is not suitable for investors who have no insurance needs. Consequently, Standard Life’s argument that Melanie’s recommendation was suitable for Yip and thus complaint with HKFI regulations is not supported by the facts.

HKFI issued a circular in October 2013 and another in December 2014 which confirms that ILAS was not suitable for Yip.

Yip to Insurance Commissioner, Annie Choi (Feb. 9th, 2015)

OCI to Yip (Feb 23, 2015)

Yip to OCI (Feb 24, 2015)

Yip to OCI (Feb 27, 2015)

Yip to Standard Life (April 9, 2015)

‘Financially Toxic’ Savings Plans Generate Morally Toxic Ad Revenue for International Adviser

Expert Criticizes ClaimsInternational Adviser’s most recent “Top Story” was about a Hong Kong adviser named Jessica Cutrera who made unusually honest comments about OCI’s recent ban on the payment of indemnity commissions—a practice which some regard to be a form of bribery.

One effect of OCI’s “ban on bribery” was the death of savings scams, like Zurich Vista, which have indemnity commissions embedded within them.

Commenting on the scams, Jessica Cutrera said, “These indemnified commission contractual saving plans which have been sold in Hong Kong for years – but are illegal in many other developed markets – are long overdue to be removed from sale.”

“I do think there will be a demise of the firms whose primary business was selling these very lucrative savings plans.

“These products are financially toxic and eliminating the sale and the seller is a good thing. Plenty of the IFAs in Hong Kong will survive and thrive, particularly those that have always offered a diverse range of products and services to their clients, not limiting themselves to selling savings plans, and who put their clients’ interests ahead of commissions.

“I sincerely hope that the sale of these or similar products that are harmful to investors does not ever recover.”

While it is laudable that International Adviser would publish a story about an adviser with the audacity to speak the truth, it must also be noted that International Adviser had no qualms about taking ill-gotten money in exchange for promoting a ‘financially toxic’ savings plan—RL360’s Quantum—on a giant banner right next to Cutrera’s scathing quotes:

RL360 Quantum Ad

Screenshot of International Adviser’s article about Jessica Cutrera, surrounded by a giant ad for RL360’s Quantum

Quantum is one of the most notorious savings scams in the Middle East. Numerous victims of the product have shared their horror stories on THIS discussion forum. One angry investor calls Quantum a “piece of shit” and advises other victims to “get out of this product today”.

Presumably, RL360 paid for ad space because it believes International Adviser’s main audience is the type of people who would sell “piece of shit” savings plans like Quantum. If that is true, then International Adviser should maybe consider changing its name to something more appropriate, like this:

International Swindler Magazine

Alternatively, International Adviser could, in the future, choose to have more scruples about the kinds of products it allows to be promoted on its website.

SFC ‘Listens’ to ILAS Victims but Refuses to Answer Questions

Small SFC LogoThis morning, a large group of ILAS victims met with 8 representatives from the Securities and Futures Commission. One by one, each victim told his or her story. Afterwards, Lindell Lucy (author of this blog) gave a PowerPoint presentation which made the case that sales of ILAS fell under SFC jurisdiction—contrary to SFC’s persistent denial. A copy of Lindell’s PowerPoint can be downloaded HERE.

When an SFC executive was pressed to answer whether selling an investment fund within a portfolio bond was an SFC-regulated activity, he answered, “It’s not the right time or place to make a determination on these types of things.”

He was correct. The right time to make a determination on these types of things was at least two decades ago.

Some of the victims at the meeting had been sold a scam investment fund wrapped in an ILAS portfolio bond. These victims previously filed complaints with the Office of the Commissioner of Insurance, but OCI rejected their complaints, arguing that sales of investment funds (even within portfolio bonds) fell outside of OCI’s jurisdiction. In a meeting held on Feb 9th, Insurance Commissioner Annie Choi said that this activity fell under SFC jurisdiction.

An SFC executive declined to comment on Annie Choi’s position.

However, he said that SFC continued to stand by its position as stated in THIS 2009 circular.

When it was pointed out that many of the assumptions and statements in that circular were false, SFC made no comment—just ‘listened’.

Unlicensed, Thailand-Based Financial Adviser Expands Illegal Business Operations Into Hong Kong

Neil Robbirt Profile

Neil Robbirt, CEO of Global Investments

In many parts of the world, commission-driven sellers of dodgy insurance policies and investment funds euphemistically describe themselves as “financial advisers”. Some stretch the truth even further, calling themselves “independent” financial advisers.

This misleading sales tactic has now been outlawed in the UK, but British insurance salesmen who expatriate to poorly regulated foreign countries continue to abuse the English language, as well as the gullibility of inexperienced investors.

Neil Robbirt, CEO of Global Investments, is one of these British salesmen.

Reckless Disregard for Thai Law

Global Investments has been headquartered in Thailand since 1994.  The company’s website states that it has sold financial products to over 3,000 people, and that it is “proud to be one of the most reputable and well-established names in the financial services industry”.

An official from the Thai Securities and Exchange Commission (SEC) has confirmed by email that Global Investments and Neil Robbirt are not licensed to sell investment products in Thailand, a fact which can be verified by checking here on the SEC’s website.

The penalty for selling investment products in Thailand without a license is between two and five years’ imprisonment and a fine of 200,000 baht to 500,000 baht.

An official from the Thai Insurance Commission confirmed by phone that Global Investments is also not licensed to sell life insurance policies.

The penalty for selling insurance policies in Thailand without a license is up to 6 months imprisonment and a fine of 50,000 baht.

Ponzi Scheme Promoter

Global Investments has left a trail of evidence on the internet showing how it misleadingly and negligently promoted the LM Managed Performance Fund (MPF), an unregulated collective investment scheme which is now known to have been a Ponzi scheme. The South China Morning Post has reported that the fund paid upfront commissions as high as 15%. The commission levels were so far above normal that it immediately sent up red flags to numerous industry insiders, such as Martyn Terpilowski, who identified the fund as a Ponzi scheme 4 years before it collapsed.

Below is an advertisement which Global Investments apparently paid for, in its attempt to boost sales and cash in on LM’s juicy commissions:

LM MPF Advertisement - Global Investments

Source: Page 5 of the 16 Sept 2011 Edition of AWOL

The ad claims there were “no fees”, even though the fund manager (LMIM) collected 5-10% per year in fees and paid salesmen up to 9% upfront commissions at the time. The ad also emphasizes that LM was regulated by ASIC, while neglecting to mention that the MPF was not.

The ad appears to target the general public, despite the fact that the MPF was a “professional investor” fund, not intended or suitable for ordinary retail investors.

“Poacher Turned Gamekeeper”

One ex-client alleges that Global Investments sold the LM MPF to over 100 people.

An LM victims group leader says that the company “topped the league table of all unlicensed Thailand-based ‘financial advisers’—both in number of clients trapped in MPF and total value of losses caused.”

After the MPF collapsed, CEO Neil Robbirt joined hands with several other “advisers” who had been flogging the fund. Together, they formed the executive committee of the “Advisers Committee for Investors” (ACI), a group of salesmen purporting to be fighting for the best interests of the people they had screwed. (See here.)

One LM victim cynically describes the ACI as “poachers turned gamekeepers”. Many believe that one of the main objectives of the ACI is to deflect attention away from the executive committee’s own greedy, reckless, and in some cases illegal behavior.

Luring Retirees into High Risk Funds

In an article originally published in the Bangkok Post, Neil Robbirt claimed that most of his clients were retirees and that he convinced them to put their money in funds that were allegedly earning returns of 12-14%.

In the same article, he also plugged the LM MPF’s “fixed rate of return” of 8.32%, which was itself so high that it was too good to be true.

On his company’s website, Mr. Robbirt is quoted as saying, “discretion is guaranteed in the interests of each and every Global client, and we believe we have developed a renowned reputation based on integrity, professionalism and the provision of expert advice.”

A legitimate “expert” financial adviser should know that high rates of return are obtained by taking high risks. An expert adviser should also know that it is reckless for retirees to allocate large portions of their portfolio to high risk assets, as retirees cannot afford to lose a lot of money. Most retirees are too old to reenter the workforce and rebuild a lifetime of savings.

It is therefore hard to understand how funds allegedly earning 12-14%, or even 8%, could be construed as in the best interests of retirees.

A 100% Return Becomes a 100% Loss

In the same Bangkok Post article mentioned above, Mr. Robbirt boasted about a property fund he was recommending. He said he expected investors to double their money.

This particular property fund invested in a “luxury development outside Pattaya called Ocean’s Edge, [consisting] of 32 exclusive penthouse-style apartments with infinity pools developed by an Australian Team.”

After being introduced by a “friend”, one of Global Investments’ ex-clients says Mr. Robbirt convinced him to invest 2.5 million baht in the Ocean’s Edge fund in 2007. He was told he’d get his money back plus 100% profit within three years. He was also promised an additional 15% interest for each year that the money was not repaid on time.

As of 2015, no money has been repaid. The apartments remain empty, as no buyers have materialized.

The ex-client is not optimistic that he will ever see his money again.

Making matters worse, he says Mr. Robbirt also convinced him to sink tens of thousands of pounds in the LM MPF Ponzi scheme, and tens of thousands more in a Zurich policy which he eventually cashed in at a 60% loss.

Below is a promotional video for the unsold Ocean’s Edge apartments:

The ex-client claims that Mr. Robbirt put a deposit on one of the Ocean’s Edge apartments himself. He says Mr. Robbirt used this fact to underline his confidence in the inevitable success of the fund he was promoting. When he was finished promoting the fund, Mr. Robbirt withdrew from the venture and recouped his deposit back.

Mr. Robbirt now claims he never earned a penny promoting the fund, and he takes no responsibility for his clients’ losses or the fund’s failure.

How a “Financial Adviser” Earns His Pay

Another former Global Investments client, who was also introduced by a friend, says Mr. Robbirt convinced him to put over half a million pounds in the LM MPF. The victim describes his experience with Mr. Robbirt as follows:

“Our last meeting was in February 2013. The agenda contained an item expressing reservation over my [relatively high] exposure to the LM MPF. At the meeting the item was met with what could almost be described as a rebuke for suggesting I should decrease my exposure to LM MPF. In no uncertain terms was I assured of the depth, quality and strength of the fund and consistency of performance and he saw no reason to adjust my position.

Less than a month later 2/3 of my life savings had gone.

I raised every aspect of my complaint with him over email and I have asked that at the very least all the LM commission he earnt is returned to me. He would not reveal his earnings but in my estimation it is over £80,000. He has point blank refused to consider any return.”

Dishonest as Ever

Currently, the “About Us” page of Global Investments’ website says:

Our philosophy is based on service through best advice. That means placing our client’s best interests at the heart of everything we do. As an independent company we are not tied to any one product or service provider. This translates into unbiased advice, fair and transparent terms and conditions, highly competitive fees and charges and a range of solutions from global financial institutions in highly regulated jurisdictions with routes of recourse and government backed investor protection schemes.

Before trying to determine how many lies and half-truths are in the above paragraph, consider the following facts:

  • LM victims have had no “routes of recourse” in any jurisdiction, let alone a “highly regulated” one.
  • An “independent” financial adviser, as defined by British law, is one who has no conflicts of interest, i.e., one who does not accept commissions from product issuers and is licensed to give investment advice on all products available in the market. An “independent” financial adviser only receives payment directly from his/her client.
  • Global Investments once paid for advertising in a Thai magazine, but rather than try to sell unbiased advice, it attempted to sell a high commission investment fund (the LM MPF), acting as the de facto marketing division for the fund manager. Global Investments’ website features prominent information about high commission, ripoff insurance wrappers (portfolio bonds), but the website does not mention low-cost, no-commission investment products, such as ETF index funds.
  • Global Investments has withheld information from clients about the commissions it has received. In some cases, Global Investments has claimed that there were “no fees”. News reports indicate that the commissions received by Global Investments were exorbitant. 

Global Investments Expands Into Hong Kong—Without a License

Recently, Global Investments upgraded its website, The company purports to have an office in Hong Kong, situated in the famous and very expensive Two IFC Tower. Former clients say they were previously unaware that Global Investments had an office in Hong Kong.

Global Investments International - Website Home Page

Screenshot of the home page, taken on March 30, 2015

Global Investment’s main website links to an affiliated website,, which contains information that aims to convince former British residents to transfer their life savings into high commission investment and insurance products.

QROPS Direct Website

Screenshot of home page, taken on April 2, 2015

There are no records that Global Investments, QROPS Direct, or Neil Robbirt are licensed to sell insurance and investment products in Hong Kong. Searches on the SFC, CIB, and PIBA websites come up empty.

The penalty for selling investment funds in Hong Kong without a license is up to 7 year imprisonment and a fine of $5 million HKD.

Selling insurance policies without a license is punishable by up to two years imprisonment and a fine of $1 million HKD.

Global Investments’ Hong Kong Office Is Merely “Virtual”

Global Investments’ Hong Kong address is listed as the 19th floor of Two IFC. A Google search for this address brings up links to a company called ServCorp, which offers a cheap service known as the “virtual office”.

Below are some ads excerpted from ServCorp’s website:

Your Address Could Be Here!

Your Phone Answered As You Like

“A Business of Any Size Can Sound Like a Fortune 500 Company”

ServCorp openly admits that it helps small financial services companies dupe potential clients into believing that those companies are more well-established than they really are. The service is a godsend for fly-by-night operators like Global Investments, who do not have a license to operate legally.

“Your Calls Will Find You No Matter Where You Are”

ServCorp offers companies based in one country (such as one with a weak legal and regulatory system) the opportunity to appear to be based in another. Global Investments apparently found this service to be appealing and potentially lucrative.

A Phone Call with a “Global Investments” Receptionist

I made a few calls to the phone number listed under Global Investment’s Hong Kong address. I recorded those phone calls and have uploaded them below.

Clip 1

In the first call, the receptionist answered the phone saying, “Global Investments Hong Kong Limited. How may I help you?”

When I told her that her company appeared to be unlicensed, she tried to transfer me to “Mr. Neil”, the company’s CEO.  I told her I did not want to talk to Mr. Neil, and that I instead wanted to talk to her. When I asked her whether she worked for ServCorp, she admitted that she did.

She then transferred me to Mr. Neil, so I hung up.

Clip 2

When I called again, I asked if ServCorp had a policy of checking whether its clients were licensed to do the businesses they were purporting to be doing. The receptionist said there was no such policy. She then transferred me to another receptionist who pretended that she did not work for ServCorp but instead worked for Global Investments.

At one point, she said she could not hear me and hung up. I am not sure if she was lying.

Clip 3

When I called again, the receptionist continued to pretend that she worked for Global Investments and not ServCorp, so I asked how long Global Investments had been selling investment products in Hong Kong. She said, “Since 2003”.

I repeated that the company appeared to be unlicensed. I asked her if she could tell me whether Global Investments was a “legitimate company”.

She said, “I cannot provide the information for you at this moment.”

I told her that information on the internet indicated that Global Investments had historically been based in Thailand. I asked whether Mr. Neil was currently in Hong Kong or Thailand. She said she didn’t know.

I was eventually transferred to Mr. Neil again, so I hung up.

Clip 4

When I called again, I pointed out that both Global Investments and ServCorp had exactly the same address. I asked the receptionist whether she worked for both companies. She said no. I told her I thought she was lying.

I pointed out again that Global Investments was not licensed to sell investment products, and I explained to her that selling investment products without a license was a criminal offense in Hong Kong.

I told her I wanted to know ServCorp’s policy regarding clients who were breaking the law. I asked whether ServCorp would continue to facilitate illegal activity, or whether it would terminate its business relationship and report illegal activity to authorities.

Before she could answer, we were cut off by a bad connection.

Clip 5

When I called back, the receptionist would not tell me anything about ServCorp’s policy regarding clients who were breaking the law. I concluded by telling her I thought ServCorp should stop doing business with Global Investments and report “Mr. Neil” to the authorities.

Ex-Clients Seek Justice

Many ex-clients of Global Investments have lost significant portions of their retirement savings. They have spent more than two years trying to recover their money, but so far, they have had no success.

Earlier this week, both the Thai and Hong Kong regulators were informed of Global Investments’ unlicensed business operations.

To date, the company has been allowed to operate outside the law for over twenty years without being held accountable.

Indignant ex-clients are hoping that regulators will finally bring Neil Robbirt and his company to justice.

Unlicensed Financial Advisers Defy Thai Regulator After Being Placed on Investor Alert List

In July 2014, Professional Portfolio International was placed on the Thai SEC’s investor alert list after the company was caught selling dodgy, high commission insurance policies and investment funds without a license. Eight months later, PPi appears to be at it again.

PPi Logo (2)

PPi’s website ( remained inactive after it was placed on the SEC’s alert list. However, a few weeks ago, PPi advertised an event at the following venue in Bangkok:

PPI Events March 10

Recklessly, PPi afterwards posted photos of the event on its website, giving the SEC sufficient evidence to take PPi to task for repeated lawbreaking. Two of the photos show PPi’s advisers giving a PowerPoint presentation on “Investing in Managed Futures”.

An angry ex-client has forwarded the above information to the Thai SEC. One of PPi’s advisers, Gary Bradford, advised the ex-client to invest—through a QROPS and a portfolio bond—in the LM Managed Performance Fund, an unregulated fund which paid abnormally large commissions and is now known to have been a Ponzi scheme.

Gary Bradford is visible in the audience in photos 3 and 6 above.

The ex-client claims that Bradford “fraudulently used pretend qualifications from the Chartered Institute for Securities & Investments (CISI, UK)”.

After the ex-client filed complaints with CISI, CISI confirmed that Bradford was not a member and asked him to remove the credential from his LinkedIn profile and business cards. Bradford has not yet removed the credential from his LinkedIn profile.

Gary Bradford LinkedIn Profile

The ex-client has not recovered any money yet, but would be pleased to at least see PPi’s advisers behind bars.

According to an article in the South China Morning Post, the penalty for selling investment products in Thailand without a license is “between two and five years’ imprisonment and a fine of 200,000 baht (HK$48,650) to 500,000 baht”.

Gary Bradford’s photo has been removed from the “Our Team” section of PPi’s website, though he apparently continues to be part of the team. Eric Jordan and Roger Parry are currently listed as senior figures at PPi:

PPI - Eric Jordan & Roger ParryPPi’s website claims that it has an office at the address below. If true, the SEC would do well to pay a visit.

PPI Address