A Question of Fraud

One intermediary's web site still states: 'established... to provide independent and confidential financial advice to expatriates living overseas'

Questioned prior to March 19th, 2013 with 'What are your fees for investing me with LM?' that intermediary answered with the comment - 'We don't get paid anything'. Apparently an answer also given to other LM investors spoken to.

LMIM only made their products available via intermediaries. One couldn't have dealt direct with LMIM if one had wanted to (At least in the case of the MPF). It's now come to light amongst other items surfacing in this fiasco that intermediaries were paid out of investors monies set aside by LMIM as management fees. The industry term was 'trail fees'. The portion of those monies the intermediary received was NOT a fixed amount for being an intermediary ie it was linked to investment volume, quantity or length of investment in some form or fashion and it was not declared to the investor.

The same intermediary who stated 'We don't get paid anything', has now stated the trail fee figures are regarded as private.

Why are these figures private (and other fees not)? Because they are embarrassing? Because they reveal something about this situation that the intermediary and LMIM would prefer us not to know? If so, what could that be? Does it compromise the Independent Financial Advisor status that the intermediary describes himself with in his efforts to attract business? If these figures are revealed will we see a picture of betrayal and dishonesty emerge? A betrayal of clients who came to the intermediary for independent advice and received the recommendations, guidance and direction of a 'LMIM bought' salesman?

Will we see a case of intentional deceit for personal gain?

The fees the intermediary received for advising in regard to wrapped funds such as QROPS, for example, are not private and, it would also seem, are negotiable to some extent.

Why the difference?

Is the difference because LMIM wanted to (or had to) offer such good returns that the intermediary was encouraged to sweep investors in at a higher rate / volume than the intermediary would sweep them into investments offered via a transparent, declared fee system?

Is it possible this and maybe other intermediaries were intentionally operating a system of undisclosed fees in an attempt to conceal the embarrassingly high reward and with it the indisputably blatant disregard for the 'independent' status of their advice.

Is that intentional deceit made for personal gain?

Is that fraud?

Footnote 14th December 2013: Interestingly the website and business in question - the Thai based intermediary operating out of Bangkok named Global Investments Far East Ltd appears to have removed the word 'independent' from the web page creating a strong suggestion that there was indeed a fraudulent element to this operation!