REGULATION

CEO's stake risked conflict of interest

Global chief Nigel Green owned shares in several subsidiary businesses that profited from the insurance plans sold by deVere

PUBLISHED : Thursday, 24 October, 2013, 3:46am
UPDATED : Friday, 25 October, 2013, 11:37am

One of the complications of the deVere business model is its global chief executive, Nigel Green.

Green has owned several subsidiary businesses that profit from the sales generated by deVere's global team of 450 advisers.

The company sold insurance plans in Hong Kong linked to a fund called Valais Managed High Yield Fund, which was distributed by a firm majority owned by Green.

The arrangement created a conflict of interest in deVere's product recommendations as Green stood to profit from every extra dollar invested in funds distributed by firms that he controlled.

Hong Kong's Insurance Companies Ordinance states that insurance brokers must provide "independent and impartial advice" to clients and that they must avoid conflicts of interest.

Generali, the vendor of one insurance plan linked to the Valais fund, inserted a statement revealing Green's position on the fund, saying: "Nigel Green, CEO of deVere Group, is a director of and holds a majority shareholding in Valais Investment Management Sarl, the fund adviser."

DeVere spokesman George Prior said Green no longer had a stake in Valais Investment Management.

This is not the only fund linked to Green and sold by deVere. The firm's advisers have also marketed plans linked to the Strategic Growth Fund, which was distributed by United Asset Management, previously owned by Green.

The Strategic Growth Fund went into suspension in March, meaning that investors could not take their money out of the fund. The action was taken due to a "high level of redemption requests placed by investors", the fund manager said in a letter.

Prior said the fund had been partially unfrozen and that "all shareholding and or directorship information is in the public domain at all times".

Pulling together this publicly available information makes for interesting reading.

Valais Investment Management and United Asset Management share the same business address, according to the commercial register of Low-Valais, which lists Frontier Holdings as the sole shareholder of United Asset Management.

Frontier is registered in Gibraltar, and it has changed its name to Titanium Advisers, according to the companies registry in Gibraltar.

The registry has no record of Green's involvement in Frontier, but it does record that Beverley Yeomans was a director of the company from November 2009 to October last year. Yeomans is Green's personal assistant.

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