Another Shark in the Water? The Persistence of Bad Financial Advice

There's a new kid on the block making some rather punchy promises about what they can do with your hard-earned money. Boasting a 51.58% return on your investment (ROI) over a 12-month period... sounds too good to be true? Here’s what we know about them.

Yachtie Finance Hub is a Private Limited Company that was incorporated in June 2023. They are claiming to offer a UK Tax Return Service, CV Workshops, Property Investments and access to a Partnered Digital Asset Fund. So far so good, but let’s look a bit deeper. Yachtie Finance Hub itself is not independently regulated by the Financial Conduct Authority (FCA) which is clearly stated on their website as follows:

For the avoidance of doubt Yachtie Finance Hub Ltd is not independently regulated by the FCA. Vanquish Holdings Limited is a ‘Signal Provider’ to Pelican Trading. Pelican Trading is a trading name of London & Eastern LLP. London & Eastern LLP is authorised and regulated by the Financial Conduct Authority in the UK, ref 534484. Registered address: “78 York Street, W1H 1DP, London”

Even to the novice investor it would ring alarm bells to see so many tiers and layers in a business and one may ask: “Who am I actually giving my money to?”. With this question in mind, we approached a Senior Consultant in a prominent Wealth Management Company for their insight into the mechanics of this opaque company structure. Our source expressed some serious concerns about the structure of the business and the lack of a transparent and clear mandate for the way the company was operating.

These were the areas highlighted:

Chapters

1. Authority to Make Introductions
2. Correct Approval of Promotions
3. Financial Promotions Should Not Be Misleading
4. FCA Restrictions Placed on the Business
5. Reference to Another Company
6. Lack of Specialised Financial Expertise
7. An Opaque and Complicated Company Structure
8. Transparency and Concerns with the Vanquish VC30 Trading Strategy
9. Disclaimers and Risk Warnings
10. Final Thoughts: A Case for Caution

Authority to Make Introductions

Vanquish Capital state in their brochure that they “facilitate the formal introduction” to FCA regulated Partners.

A firm or person that makes introductions without being authorised or exempt is in breach of the Financial Services & Markets Act. Vanquish Capital does not appear on the FCA Register and they do not display the appropriate status disclosure wording for an Introducer.

Correct Approval of Promotions

As an Appointed Introducer, any Financial Promotions must be approved by their Principal firm which in this case would be London & Eastern LLP (Pelican Trading seems to be an Appointed Representative of London & Eastern LLP).

Under regulations, any Financial Promotion must display a statement of who it was approved by and the date of approval. There was no evidence of such an approval statement on any of their material.

Financial Promotions Should Not Be Misleading

The FCA’s objective is for all financial promotions to be balanced, clear, fair and not misleading.

Any promotion that fails to meet these standards is considered to be a risk to consumers which could result in them buying the wrong product for their needs. The material provided by Vanquish Capital doesn’t meet the FCA standards in several areas including:

1. You must pay regard to the target market, including the likely level of financial capability.
2. You must take account of what information the customer needs to understand the product or service, its purpose and the risks, communicating information in a way that is fair, clear and not misleading.
3. Favourable periods of performance must not be ‘cherry picked’. Comparative information must be meaningful and presented in a fair and balanced way.
4. Risk warnings must be shown ‘prominently’. They must be in ‘at least’ the same font size and in the same font style as the majority of the text and the meaning of it must not be obscured or diminished.
5. Communications must be ‘balanced’, you cannot promote only the good aspects of a product or service. If drawbacks exist you must explain what these are.

FCA Restrictions Placed on the Business

London & Eastern LLP has a restriction on the FCA Register on approving Financial Promotions relating to cryptocurrency.

Reference to Another Company

In some of the material provided by Vanquish Capital there is reference to yet another company called Alexander William Ltd.

This appears to be a separate company but seems to offer the same service and has very similar branding and content to Vanquish Capital. It is difficult to unpick if the two companies are connected or whether, alarmingly, Vanquish Capital has simply copied their material and forgotten to change the name.

When we first approached Yachtie Finance Hub/Vanquish Capital we received an introductory email from their “Client Manager” that was riddled with grammatical errors and spelling mistakes – even the spelling of the company name in the subject line was incorrect!

The email also contained incorrect terminology and some of the language used is often what one would find in scam communications. At best the communication from them is not professional, and at worst it's fraudulent.

Either option sets off warning signals. We followed up with the company’s representatives, and although they initially offered us an in-person meeting, which we promptly accepted, they swiftly withdrew the offer.

Here is our evaluation of Yachtie Finance Hub and some key considerations for anyone considering investing with them and their associated companies.

Lack of Specialised Financial Expertise

Yachtie Finance Hub’s website highlights numerous services, from funds and investment options to tax return advice and even CV-writing assistance.

While the variety of services may appear convenient, it raises a question about the company’s primary focus. Unlike most wealth management firms, which prioritise financial and investment services, Yachtie Finance Hub seems to operate over a broader spectrum. This lack of exclusive focus on investment management may be a red flag for clients seeking specialised financial advice.

UK wealth managers are typically regulated and focus narrowly on managing investments and wealth planning. In contrast, Yachtie Finance Hub’s wide range of non-financial offerings could signal that investment advice may not be their central expertise, potentially affecting the quality and specialisation of their service in this area.

The low-level elements of the service proposition, e.g. the CV workshops, could potentially act as a funnel for investors into their more speculative offerings: a sprat to catch a mackerel!

Over the weeks we have been appraising the company we have also noticed that what was offered initially as a free UK tax return service, changed to one that had a £99 charge and now the service has almost vanished off their website completely.

It begs the question whether these ‘incidental’ services really exist at all and aren’t, in reality, an elaborate personal data collection tool?

An Opaque and Complicated Company Structure

Yachtie Finance Hub’s corporate structure further complicates its service offering. The organisation appears to operate through various entities, including London & Eastern LLP, Alexander William Ltd, Pelican Trading, and Vanquish Capital.

This layered network makes it challenging to identify who is responsible for providing specific investment advice, determining the suitability of products, and ultimately ensuring the client’s interests are protected.

Some of these entities, while potentially regulated by the UK’s Financial Conduct Authority (FCA) for specific activities, do not provide a clear picture of accountability.

In case of a dispute or financial issue, liability could shift across the network of companies, potentially ending with an entity that isn’t under the FCA’s regulatory reach. This lack of clarity poses a significant risk for investors who may struggle to understand who is directly responsible for their financial well-being.

Transparency and Concerns with the Vanquish VC30 Trading Strategy

One of Yachtie Finance Hub’s products, the Vanquish VC30 Trading Strategy, has raised several transparency concerns. Marketed as a foreign exchange (FX) trading strategy, it lacks essential details about the underlying assets, making it difficult for investors to gauge its fit within a diversified portfolio.

Despite its positioning as an FX strategy, the performance of Vanquish VC30 is compared to equity market indices like the Standard and Poor’s (S&P) 500 and the MSCI World Index. This could mislead investors by implying equity-like returns in a foreign exchange product, blurring the actual risks involved.

Additionally, the absence of standard investment identifiers, like ISIN or SEDOL codes, means it is unclear if this product can be held within UK tax-efficient accounts, such as Self-Invested Personal Pensions (SIPPs).

Perhaps most striking is the fund’s high-performance fee of 30% coupled with its 2023 performance claims, which indicate that investors could have quadrupled their capital with virtually no downside. While impressive, such relentless outperformance is often a red flag, as it can indicate unsustainable practices or risks not fully disclosed to investors.

Disclaimers and Risk Warnings

One potentially positive note we found in the Vanquish Capital factsheet is a disclaimer that advises clients to ensure they fully understand the trading risks and to seek independent advice if necessary.

However, such a disclaimer may serve more as a legal safeguard for the company rather than an effective means to protect client interests.

Final Thoughts: A Case for Caution

While Yachtie Finance Hub and its associated companies may provide ample information and disclaimers, the structure and transparency issues warrant caution for potential investors.

The lack of specialisation in wealth management, the layered and unclear corporate structure, and the ambiguity surrounding certain products’ investment strategies are all factors that should give investors pause.

For those considering investing through Yachtie Finance Hub and its associated companies, it may be wise to seek independent advice and ensure a thorough understanding of all risks, particularly for retirement or long-term financial planning. After all, a responsible approach to investing means not only evaluating potential returns but also ensuring a clear understanding of the entities managing your wealth.

If you have concerns about any investments you hold, we would like to hear from you. Get in touch with us today or let us know your thoughts in the comments section below.

Disclaimer: Any advice in this publication is not intended or written by Marine Accounts to be used by a client or entity for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party matters herein.