DeVere conduct brought into question overseas
Original article here.
A number of the DeVere Group’s foreign offices have had their conduct brought into question, with the regulators in Japan, South Africa and Hong Kong all taking action over current or former DeVere entities.
The DeVere Group Tokyo K.K. was added to the Japanese Financial Services Agency’s ‘cold calling’ investors alert list last week.
The list is of non-registered or non-authorised entities with the Japanese FSA, based on cold calling allegation information received from investors. “Investors should be aware that the solicitations of investment by these listed entities have a possibility of cold calling,” the alert said.
A spokesman for DeVere Group explained that it only advises on trusts in Japan, which is why it is not registered with or authorised by the Japanese FSA and the company is entirely correctly structured for its business operations in the country.
“The overwhelming majority of our 80,000 clients come to us through referrals,” he stated. “A small percentage of our clients are introduced to our organisation and the products that might be relevant to them by telephone. This is standard practice within many major firms in the financial services sector, amongst other industries.”
The listing comes in addition to confirmation from the South African Financial Services Board that it is looking into DeVere’s conduct in the country.
The South African board told FTAdviser: “The Registrar of Financial Services Providers says as a consequence of findings arising out on an onsite visit we are investigating certain issues with DeVere and are considering appropriate regulatory action.”
The DeVere spokesman responded that the previous head of DeVere in South Africa authorised a fund platform with the FSB, whose use is now being queried.
“There is no complaint received and subsequently no investigation into any financial loss to clients. This FSB enquiry is solely based on the structure of the platform and nothing else.”
Meanwhile, in Hong Kong, the Confederation of Insurance Brokers referred two cases involving the DeVere Group Hong Kong to its independent disciplinary committee for hearing.
“It is also actively investigating various allegations regarding that entity [DeVere Group Hong Kong], its former employees and individuals connected with that entity,” stated secretary general Eric Lee, adding that he was unable to provide further details about the nature of such allegations while they remain under investigation or are pending hearing.
The DeVere Group Hong Kong is listed as suspended on the CIB’s register of members, although a spokesperson for the DeVere Group explained that this business was sold “some time ago” to a private individual and the new owners are in the process of changing the name.
The case detail says the suspension became effective from 25 February 2014 and was because the firm “failed to nominate a replacement chief executive within 30 days after a vacancy occurred”, being fined HK$40,000 (£3,290).
“As the entity currently has no chief executive, we understand that it has been temporarily suspended, as would be expected,” the DeVere spokesman said.
Last month DeVere Group’s conduct was called into question by a heavily critical spoof website popping up using similar branding, only to be shut down after the global advisory firm said it would take legal action.
Mike Coady, managing director of DeVere UK, recently told FTAdviser during a video interview on the subject: “Sometimes you work in jurisdictions where, perhaps, they don’t necessarily have such a comprehensive regulator.
“The rules for what you do in terms of ex-patriot advice or guidance aren’t perhaps as clear as they are in mature, domestic markets.
“It is something that we have to commit a considerable amount of resource to and hope to get right 95 per cent of the time but inevitably sometimes you do make mistakes.”