As a professional financial planner, I’m convinced that one of the most important roles that I, and other planners, can provide is protecting our clients from bad investment decisions which includes being safe from predatory fraudsters.
Sadly, there are a lot of them about. Particularly in the offshore world that we operate in.
I especially feel this responsibility, given my experience of living and working in Hong Kong, and our current position of having a great many clients in the expat community.
Financial cowboys often target expats
It’s a sad fact that expats based in places like Hong Kong and the Middle East are often targeted by financial cowboys.
The key reasons for this are:
- Expats tend to earn more overseas than in their UK-equivalent role
- They will commonly have substantial pension and investment assets
- They appreciate the attraction of a low-tax regime
- Their financial arrangements may lend themselves to “consolidation” or “proactive management” – two of the most common offers made by unscrupulous financial salespeople.
The other key point is that financial regulation in these geographies can be lax, to the point of sometimes non-existent, which allows these so- called financial advisers to operate in the way that they do.
For example, Hong Kong does not regulate pension advice given to individuals regarding their UK arrangements.
All this means that the financial sharks are often circling and if you are an expat with substantial financial assets you need to be careful.
Brite Advisors appear on my radar for the first time
I was prompted to write this article by two phone calls I received within a relatively short space of time.
The first was from a potential client who outlined a financial solution for UK Inheritance Tax (IHT) planning purposes involving a Hong Kong-based pension scheme that he had been offered.
This set alarm bells ringing, as I knew what they had been told would happen wasn’t possible given their specific situation.
The client mentioned the name of Brite Advisors, so I spoke to a trusted contact of mine in Hong Kong about them.
He confirmed that it was widely known that the owner of the company, Mark Donnelly, had a criminal history, and that he had been found guilty of concealing this when he made an investment licensing application to the Hong Kong regulator.
And an Asian Private Banker report confirmed this.
A second client mentions Brite Advisors
I was still digesting the information about Brite Advisors and Mark Donnelly, when a second call brought their name to my attention again.
This came from an existing client who was looking for advice regarding approximately £1 million of investment assets.
During the call he also mentioned that he had a further £1 million in a UK pension fund that he was in the process of transferring overseas to a Hong Kong-based pension but that was outside the scope of his advice requirements.
A few questions revealed that the pension was with Brite Advisors. So, after carefully choosing the right moment, I had to let the client know my concerns over this company and his assets with them.
This client then started conducting his own research into my observations and came to the same conclusion that I had given warning about. He lost all confidence with keeping his money with them.
As a result, we started the process of transferring his pension away from Brite. However delays were created at every opportunity (another red flag) and then towards the end of 2023, FNG reported that the Australian Securities and Investments Commission (ASIC) had suspended Brite in Australia (the entity responsible to managing the clients pension assets).
As a result, my client’s pension assets have been frozen by the Australian regulator, and this is likely to result in an ultimate substantial shortfall of assets for my client.
My research unearths some troubling information
Brite Advisors have a flashy website that boasts of them providing offshore services for expats.
When it comes to a proposition that would appeal to the average Brit living and working overseas, they say all the right things.
The website references low charges, and an “open and transparent” process that avoids the excessive fees of other typical offshore competitors.
They have offices in the Bahamas, Switzerland, Australia, South Africa, Dubai, and Hong Kong. They even have a handy map of the world showing their geographic spread.
But some simple digging revealed more and more problems.
Someone named Gordon Crouch had a prominent role in the company and was presumably appointed by Mark Donnelly or someone on his behalf. According to Edinburgh Live, he has recently been convicted of embezzlement and is “being pursued” for £760,000.
A recent Money Management article in Australia reports that it is “highly likely” Brite Advisors misappropriated client funds of up to AUD$100 million. Furthermore, the ASIC website confirms that this figure could be as high as AUD £1 billion.
There is also evidence that Brite Advisors have been operating in the United States. A Securities and Exchange Commission report references the Australian company and their failure to report “material risks and conflicts” relating to their clients in the US.
Regulatory failure has meant more people are being targeted
It frustrates me to think that no other regulators in countries where Mr Donnelly’s company, Brite Advisory Group (we understand this is a Hong Kong registered company), has acquired controlling interests have not picked up on this and stopped him.
The main offending company where funds have allegedly been misappropriated from is Brite Advisors PTY – regulated in Australia by the ASIC. Aside from obvious questions over the ASIC’s assessment of the fitness and properness of the company owner, it seems that the Australian authorities had taken their time to act as Brite Advisors PTY had not reported the value of it’s funds under management since back in December 2019, (nearly 4 years prior to the freezing order being granted.
In addition, Brite Advisory Group owns PSG SIPP – a UK SIPP operator that is regulated by the Financial Conduct Authority (FCA).
They also own Basi and Basi Financial Planning and Onvestor, both again regulated by the FCA.
Keep an eye on our website and social media channels
As a professional financial planner, I take my responsibility seriously when it comes to wanting to help expats who are being targeted by financial criminals.
Producing this article and raising awareness of a specific example is recognition of that responsibility.
As well as sending it in this newsletter, it will remain on the Charlton House website and will become a “live” document as I plan to update it whenever more information comes to light, or there are regulatory developments.
I will then highlight these updates in future monthly newsletters and on our social media channels. I will also produce some guidelines regarding the due diligence checks you should look to make if you are thinking of dealing with a financial advice firm for the first time.
Shining a light on unscrupulous financial scammers is important. That goes for the chancer trying to con old people in the UK out of money, up to the kind of scenario I’ve highlighted here.
For more information about financial fraudsters, and some of the methods they use, I draw your attention to two previous articles I’ve written in the subject.
The first highlights some simple ways you can help protect yourself, while the second looks at offshore investment scams that fraudsters will often use to target expats.
Get in touch
If you believe you’re being targeted in the way I’ve described in this article, let me know as soon as you can.
Likewise, if you’re reading this and alarm bells are ringing over a previous financial transaction you’ve had, or currently hold, the sooner you get in touch, the better.
You can contact us by email or, if you prefer to speak to us, you can reach us in the UK on +44 (0) 208 0044900 or in Hong Kong on +852 39039004.
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