FCA in fresh adviser warning over Harlequin Sipp approach

The Financial Conduct Authority has issued a fresh warning to financial advisers over Harlequin property investments after a Caribbean-based company that is part of the group approached self-investment pension savers seeking fresh investments for one of its resorts.

In an update to information already on investments made through Harlequin Management Services (South East) Ltd, the UK sales arm that trades as Harlequin Property and entered administration in April, following an earlier alert to advisers in January.

The FCA said it became aware on 13 May that another group company, Harlequin Hotels & Resorts, contacted investors who are in a position to do so to fund the balance outstanding on the development from the self invested personal pension or small self administered schemes, or that wish to relocate their investment from another Harlequin resort, to contact them.

Investors were apparently told that Harlequin Property (SVG) Ltd, a St Vincents and the Genadine-based group company, is working with Sipp and Ssas providers on completing developments.

The FCA said: “We wish to remind financial advisers that our expectations where financial advisers are asked for advice on overseas properties purchased through Harlequin group were set out in the alert of 18 January, which remain valid.

“Also, please note that is not regulated by FCA and it is not a company incorporated in the UK. Harlequin Property (SVG) Limited is based in St Vincent and the Grenadines.”

It has warned financial advisers recommending that investors pay monies or further monies to Harlequin to “proceed with caution”.

The FCA said: “You should ensure that consumers fully understand the risks involved with the investment. You should also advise consumers to obtain legal advice from lawyers in the country where the property is located before proceeding with any investment in a company in the Harlequin group.”

A spokesperson for Harlequin told FTAdviser: “Harlequin supports the FCA’s stance of ensuring purchasers are fully aware of what they are investing in.”

In an exclusive interview with FTAdviser, David Ames, Harlequin chairman, said that the firm was currently in talks with a Sipp company that wants to offer Harlequin investments.

Mr Ames said: “I spoke to a Sipp company and [it] is prepared to put business back through for us but only for completed properties and not off-plan, and is prepared to put through completed Buccament Bay properties.

“There is a confidence coming back now they realise that things aren’t what they are made to believe.”

Mr Ames also stated that while Harlequin Property is in administration, Harlequin Hotels and Resorts is financially solvent and able to continue operations.

On a webpage for consumers, published yesterday (17 June), the regulator recommended prospective Harlequin investors contact a financial adviser and to exercise caution.