Hoodless Brennan

Do not use Hoodless Brennan for advisory broking. I have followed their advice and they have completely destroyed my portfolio. They're cheap for online use and I guess you get what you paid for

When shares are dropping rapidly one should expect a phone call to sell, this happened on very few occassions

http://www.fsa.gov.uk/pages/Library/Communication/PR/2006/079.shtml

FSA fines Hoodless Brennan £90,000 for unacceptable sales practices and not treating customers fairly

Margaret Cole

The FSA will not tolerate this method of selling shares to private customers.
FSA/PN/079/2006
17 August 2006

The Financial Services Authority has fined stockbrokers Hoodless Brennan Plc (Hoodless) for using unacceptable sales practices and failing to treat its customers fairly when selling shares in a company called Knowledge Technology Solutions Plc (KTS) on 12 June and 25 July 2003.

The FSA found that the sales practices employed by Hoodless' brokers, when selling KTS shares to customers, fell below both regulatory standards and Hoodless' own internal standards. The unacceptable sales practices included persuading customers to buy stock when they were not ready to do so and persuading customers to take more stock than they appeared to want.

Brokers also used information about a contract between Hoodless and KTS, that was not in the public domain, as an inappropriate sales aid to persuade customers to buy KTS shares. They provided customers with unsubstantiated personal opinion on the shares which was potentially misleading. Brokers had not been briefed about the contract and as a result were not in a position to comment on its relevance to the sale of KTS shares.

The FSA found that Hoodless had failed to deal appropriately with the issue of whether the information it held about the contract with KTS was in the public domain. It did not clarify the position with KTS, take professional advice internally or externally, or take adequate steps to brief brokers on whether they could mention the contract to customers.

Margaret Cole, Director of Enforcement at the FSA said:

"The fair treatment of customers must be part of corporate culture so that a firm treats its customers fairly on all occasions of its dealings.

"Brokers at Hoodless Brennan used unacceptable selling practices and did not pay enough attention to the interests or the information needs of their customers. Nor did they take time to communicate with their customers in a way which was clear, fair and not misleading. The FSA will not tolerate this method of selling shares to private customers."

Examples of unacceptable practices used by Hoodless Brennan brokers

One broker persuaded his customer to buy 100,000 shares rather than the 50,000 that the customer had requested. The customer's wishes were overridden by the broker who told him, "They've already gone. I've taken them off the board." This comment implied that it was too late for the customer to change his mind even though, by this stage of the conversation, he had not received all of the risk warnings and was entitled to change his mind.

Another broker spoke to a customer who was a doctor at work in a hospital. The broker persuaded the customer to purchase KTS shares even though the customer had explained he did not want to make a decision until the afternoon as he wanted to find out more about KTS and was at work and unable to concentrate on two things at once. The broker said, "You don't need to concentrate, all you need to be able to do is say ok…that's fine."

The unacceptable selling practices included:

Persuading customers to buy stock when they were not ready to do so
Persuading customers to take more stock than they appeared to want
Referring to the contract when talking to customers when it was not in the public domain
Using the fact of the contract as an inappropriate sales aid
Providing customers with unsubstantiated and, at times, speculative personal opinion about KTS which was potentially misleading
Not ensuring that customers were provided with all appropriate information about investing in penny shares, as was required by Hoodless' own internal standards.
The FSA accepts that only a small number of customers were affected by unacceptable sales practices, customers did not suffer financial detriment and no complaints were received.

Notes for editors
The full text of the Final Notice includes the background to the case, the relevant statutory provisions, and the regulatory requirements contravened.
The FSA found that Hoodless breached Principle 2: A firm must conduct its business with due skill, care and diligence; Priniciple 6: A firm must pay due regard to the interests of its customers and treat them fairly; Principle 7: A firm must pay due regard to the information needs of its customers and communicate information to them in a way which is clear, fair and not misleading; Conduct of Business Rule 2.1.3R Communication with Customers – when a firm communicates information to a customer, the firm must take reasonable steps to communicate in a way which is clear, fair and not misleading.
The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.

Anyone who uses these brokers for 'Advisory' services is odds on to lose money. They basically know nothing and simply use your money to rack up commissions.

They always talk a good game though.....

Luke Securities

I have been an active trader for many years and use many different brokers.

From my experience it’s not necessarily the firm you deal with but the account handlers, so to say Hoodless are poor is a bit unfair on Hoodless as it is the responsibility of the account handler to call you and service your account.

If I had to recommend a brokerage I would recommend Luke Securities, the company has only been trading for a year or so but their account handlers are all very experienced and in my mind offer a very high level of service!

beartraderbull said:

I have been an active trader for many years and use many different brokers.

From my experience it’s not necessarily the firm you deal with but the account handlers, so to say Hoodless are poor is a bit unfair on Hoodless as it is the responsibility of the account handler to call you and service your account.

If I had to recommend a brokerage I would recommend Luke Securities, the company has only been trading for a year or so but their account handlers are all very experienced and in my mind offer a very high level of service!

Click to expand...

Maybe, but I'd still bet the odds of anyone finding a good broker to handle their account are at least 100:1 against if not 200+:1 against.

Just do the sums, we all know how hard it is to make money in the markets, add to this how many brokers there are and then you've got a pretty good answer to the chances of you finding one that will grow you account.

Remember, the financial markets pretty much are about making money on the back of other peoples money so a broker offering an advisory service is looking after his future income before he looks after yours. Of course, if the client makes money then all the better but if not then the broker still gets paid. Now you know why jobs in the financial markets are generally very well paid, losing isn't really an option................

I use them for on-line trading as they are cheap.

I've also used them once for advisory, currently the share is about b/e but they tried to recommend a numbrer of shares to me (pretty hard sell) and I've said no. They were mostly small penny shares (I don't invest in them as I think they're too risky). Needless to say the two penny stocks recommended (PAA and OPM) are both quite a bit down now. I might stop using them altogether.

Hoodless Brennan - name says it all

I started using Hoodless Brennan about 3 months ago and have already lost over 50% of my portfolio value. I am an inexperienced investor so decided to use a broker. All they do is recommend penny shares, nothing else. Its all hard sell and I cant believe I fell for their bs. To make it worse I called them and sold all my stock and now there is £800 missing! I called my broker who has not returned my calls. They are FSA regulated but they can get away with this sort of thing. Would the FSA do anything if I complained?

I don't use any brokerage firms that offer an advisory service. I prefer to do my own research and then if I fcuk it up completely I only have myself to blame.

The name Hoodless Brennan sounds more like a 50's gangsta. Name alone puts me right off.

That said ... advisory firms do face an uphill struggle. If they do have a genuine insider tip then this would be classed as insider trading and they can get prosecuted for it. If they give a person their opinion on a share then should that share move against what they thought and Joe Bloggs loses a grand then this is FSA territory once again. It seems that the only thing an advisory firm can do is give information that is in the public domain, but if it's in the public domain in the first place then why should we pay for it when its freely available; furthermore, why should public domain information infinitely more reliable than someone's opinion on a company? The information from so called market experts that are published on yahoo contradict each other by the hour.

The only information worth having is insider information, but this is illegal. Therefore, should an advisory firm get to hear of the latest big thing then it stands to reason that they won't share it among the masses for fear of getting into trouble with the FSA. Therefore, chances are they'd invest it the tip themselves without passing it on to those who all to frequently write letters of complaint.

Maybe Hoodless Brennan are complete scoundrels, but then again maybe prior to all this they had been inundated by "investors" complaining about why has their portfolio only gone up 10% this year - "I could do better myself" etc etc. The pressures faced by such brokerages to outperform their competitors, and keep their clients "happy" was probably a reason why this firm began to advise their clients in the way that they did, but on this occasion things didn't work out. I guess if shares in KTS had gone up then the investors that had run off to the FSA would instead be running off to the new Ford shop.

To be fair their online execution-only service works well and is the cheapest out there, and I've had a lot less problems with HB (ie none) than I have with a certain high-street name* who I've had numerous difficulties with. But I agree with the overall sentiment of the thread: don't touch advisory brokers.

* Barclays Stockbrokers - avoid like the plague.

blueclaret said:

I started using Hoodless Brennan about 3 months ago and have already lost over 50% of my portfolio value. I am an inexperienced investor so decided to use a broker. All they do is recommend penny shares, nothing else. Its all hard sell and I cant believe I fell for their bs. To make it worse I called them and sold all my stock and now there is £800 missing! I called my broker who has not returned my calls. They are FSA regulated but they can get away with this sort of thing. Would the FSA do anything if I complained?

Click to expand...

Yes, you have every right to complain to the FSA. Do this, call up HB and ask to speak to their Compliance Officer, then ask him/her 'I have a complaint to make about your services and financial managementr, please can you give me the name of your company's appointed rep at the FSA'.

That will scare the hell out of him and I guarantee you'll get some action. Always remember though to be civil and professional with these people, never lose your head etc.

Good luck

These guys are the same as every bucket shop that you find outside the UK. Could mention a lot more but not sure where that leaves me with regards to the moderators.

The only difference with the ones in the UK are that they pay their fee's to be regulated by the FSA and so ive heard they are very substantial. Maybe up to £1m per year and more. This is their licence to rip off investors.

Just cos these guys have an address in the square mile and are based in London they still recommend sh*t generally Reg S stock to get the hgh comms for the firm and the brokers.

Reg S stock you cant sell for a year etc..... Year comes and the stock has bombed.

This is the same stock that the SEC states cant be sold to the American Public so invariably ends up in the portfolio's of UK investors.

To save you getting any calls in the first place dont send off for these free company reports that some brokers entice you are free. Just gives them the right to call you up and sell you stock.

PS: Not been ripped off myself just know a lot of people who have been over the years

A little update. I emailed a complaint and basically they offered me half of the losses back to me. The reason they offered this is because the broker should not have reommended only penny shares as he knew I was inexperienced and I had stated in the beginning that I wanted a mixture of large and small companies. I took the money and learnt an expensive lesson! I find it amazing that they can do this and I know there must be so many people who get ripped off and lose more than me but dont complain.

But anyway, no more "advisory" brokers for me!!!!

I have to agree with the part of the earlier post, that much of the success of any advisory broker you use depends on the guy managing your account. What you get with a good one is not just stock tips but someone to read the research for you, to ensure you have a balanced portfolio (not all in penny stocks!) and that the spread of your assets is as you want it. That should include bonds, blue chips and some more risky shares to leverage teh return. Sadly the Hoodless Brennan's of this world aren't likely to offer this. The problem is that for the sort of input an advisory broker has to make, he's likely only to be interested in a larger account if he's any good. Professionally, I've dealt with some good ones, but it's defintiely the case that it's nto a 'one-size fits all' term. There are some real crooks out there.

It has nothing to do with the account handlers, they dont make the recommendations it is down to the company, as its their corporate team that go into the market and buy tons of high risk stock. Then give the brokers targets to keep their job, so they need to ring you to make money and keep it.(job)

I think many of you forget, penny shares arent about a quick turn, they are long term investments and are growth companies. This means 2/3 years down the line you may be in fantastic position but not in 3 months.

Finally, if you share falls you DO NOT SELL (Unless dry wells etc/litigation), as that will send it down further. Price fluctuation is dependant on the supply and demand on that particular day. Market makers are notorious for pulling prices around to generate business in the short term it has no bearing on the prospects of the company though

Your Wrong

Badger badger i think your wrong with what you say. If you want go and buy your own penny shares, go through a broker or even buy them direct from the company. Just pick the phone up and ask them. These are all bucket shops involved with companies who have a fraudster behind them and they then split the profits between the dealer, the boss and the owner of the company. Its as simple as that. Read the link below and if you get a call from an FSA regulated company or an offshore unregulated company keep your money in your pocket. Alternatively buy some stock and we can look out for your next post probably titled "IVE BEEN HAD OVER AND THE FSA WONT DO NOTHING" Sorry for the tone but the sooner people learn the sooner the square mile spank shops go bust.

http://www.thisismoney.co.uk/news/c...rticle_id=412547&in_page_id=19&in_author_id=5

gedward - you're tarring everyone with the same brush. You're absolutely correct that the 'advisory' broker who recommends nothing but penny shares is nothing more than a conman playing on greed. Naturally all the good stories in the press are about people being ripped off. What doesn't make the headlines is the less flash broker, who does the KYC checks properly, puts his clients into a conservative, balanced portfolio and makes moderate gains for them. Advising on the structure of the portfolio is as much part of the service as stock picking. Sadly, human nature is such that normally intelligent people will go into penny shares if the pitch is convincing. The FSA does sound toothless and needs to make sure the bucket shops are playing by the rules.

I had an online hoodless brennan account, and it wasnt fantastic, but it did the trick. Then one day I got a phonecall from one of their 'brokers' telling me he has loads of wonderful ideas when the chinese stock market was rattling the world back in feb/march. So i signed up to the free advisory service to see what this 'broker' could offer, and he comes back to me 4 weeks later with a hard sell on Totally PLC at 3-4p a share (cant remember exact price). I told him that I put £10000 into a gold ETF at the time, and he couldnt comprehend what an ETF was, and why I did it, and told me if i really wanted to make money, I should liquidate it and buy into Totally PLC. I stuck to my guns, and told him to bugger off... Totally lost 50% of its value in coming months, my gold ETF went up 6% from $64 a share to $68 in the same period.

He called me again last week, and I told him i was busy and that id TRY and call him again, and he rudely made me promise i would call him on a certain day at a certain time. Im waiting for him to call again, so I can tell him I have cancelled my account!

Simple research on companies before dealing with them would avoid many of these problems.

If you had done your research on Hoodless before opening an account you would realise they were a firm you should not be dealing with.

If you go to the FSA website and access the register of firms it clearly states the disciplinary action against firms. In the case of Hoodless you would see they were fined by the FSA in 2003 and 2006.

I always try and research firms before opening an account with them to see how reputable they are. Most firms who you get trouble from, such as Hoodless Brennan, there are usually warning signs.

http://www.fsa.gov.uk/register/firmDiscHistory.do?sid=61714

Advisory penny share brokers are there to facilitate the market makers and move stock and receive a 'turn' (discount) on that stock for doing so.

They will generally agree to buy a fixed amount of stock from a market marker who is keen to unwind a position and sell the stock to the broker at a large discount to market.

Often, poorer quality stocks are offered with a far bigger turn which could be 50% or more in some cases! The commission generated from sales are therefore attractive to the broker who will do their level best to persuade. Individual brokers are usually only given a limited choice or told to sell whichever 'house' stock is on offer.

I'm not saying that all recommendations will be poor or that brokers want their clients to lose out, but the setup of these operations and their purpose does not mean you will always receive unbiased 'advice'.

There is never any harm in listening to recommendations, but it is imperative to do your own research and take time to ask questions rather than be pressured into taking someones word.