Expat investors can recover losses in rogue cases

In the UAE, the Insurance Authority regulates insurance brokers, whilst the Emirates Securities & Commodities Authority governs financial advisers and the UAE Central Bank keeps bank advisers in check.

The bodies offer protection to investors and a port of call for those that believe their investments haven't been properly handled.

UK firm TLW Solicitors is dealing with several cases of financial irregularities in behalf of expats living in the UAE.

Its head of business development, Alistair McDonald, said compensation can still be awarded up to six years after a financial plan was sold, if irregularity has been proven.

“We find a majority of clients only realise they have a problem with their investment well after they made the initial investment,” he said.

“Usually they have no reason to think the trust they put into the person who advised them on the investment was mis-placed.

“It is often years later when it becomes clear there is a problem. Even if the initial advice and the transfer of funds was made some time ago we can potentially still help.

“If the adviser that gave the advice to invest was based in England or Wales, the individual taking action has six years from the time the advice was given to make a claim.

“Alternatively they have 3 years from the date they knew or ought to have known that there was an issue with the advice.”

In the UK, Financial Ombudsman Service (FOS) provides compensation up to £150,000 (DH700,000) for clients given negligent advice from an Independent Financial Adviser who is still in business.

If the adviser is no longer in business then the claim for compensation falls into the hands of the Financial Services Compensation Scheme (FSCS), with an upper compensation limit of £50,000 (DH235,000) for negligent pension or investment advice.

“If a UK based IFA has their approval with the FCA terminated, then it is feasible that they could continue to provide advice in the UAE,” Mr McDonald said.

“As such it is important to do proper background checks and due diligence on anyone offering you investment advice.”

Most professional advisory firms have a formal complaints process, and their advisors should provide details of this process upon request.

If an investor is not happy with the response from the advisory firm following a formal complaint, issues can be escalated with the relevant regulator.