Financial advisers Russell and Alan Taylor, who ran Norfolk-based investment firm Taylor and Taylor Associates, admitted to the fraud at Norwich Crown Court yesterday.
In late 2015 their firm was declared in default by the FSCS. They were once authorised by the FCA but are no longer.
The brothers moved clients’ money to a high-risk scheme without customers' knowledge. Police said the brothers used the money they made from clients to fund a "lavish" lifestyle including expensive cars and a private boat.
They moved the money of clients who wanted low risk investments to a risky fund with another one of their companies called Vantage Investment Group, without telling their customers they owned Vantage.
One retired business woman, 69, from north Norfolk, who lost money to the fraud said it had a “terrible emotional impact” on her life.
“What I really liked about them was it was a real family affair,” she said.
“I think that is what made this so upsetting, it felt they had betrayed me personally.”
Former customers had been preparing to give evidence at a long trial when the news came through yesterday that the brothers had pleaded guilty to conspiracy to defraud.
A trial at King’s Lynn Crown Court later this year was expected to last up to six months.
Ann Lown and her husband Michael from Plumstead saw their savings halve in value after it was invested by the Taylors in the Vantage scheme without their knowledge.
“Our pension fund we had invested in was virtually wiped out,” Mrs Lown, 63, said. “Both of us are still working now.
“The guilty plea was certainly most welcomed and will relieve all victims and their families from more stress and having to travel to court in King’s Lynn, but it is only the start of closure; there is a long way to go yet.
“For us, there is still a large amount of money outstanding which the Financial Services Compensation Scheme will not cover.”
The Lowns were paid the maximum amount allowed by the FSCS for the money they lost through Taylor and Taylor, but have got nothing from the investment they lost through the Taylors’ firm Vantage Investment Group.
They are hopeful they will get that back following yesterday’s guilty pleas.
Mrs Lown had insisted the Taylors put her money in low risk investments and she did not question them when they moved her savings to a risky fund.
“It was only when I got the letter from the police a few weeks later about the investigation that I discovered what had happened to my money,” she said. “It was so stressful and a huge shock.
“As an elderly woman, living on my own, I felt extremely vulnerable and was so angry that they had misled me in such a way.
“Initially I had no idea who to turn to for help and it was a horrible experience.”
“Two years on, I am lucky, I got most of the money I lost back through the financial compensation scheme, but that doesn’t diminish the terrible emotional impact it had on my life for many months.”
Garry and Arlene Todd had used Taylor and Taylor for 25 years when they noticed in 2015 that the value of their pension with the company had halved.
Mrs Todd said she initially thought there had been a typing error on the statement. But over the next two years the full scale of the fraud became clear. After saving all their lives, the Aylsham couple had lost £63,000.
They have managed to get money back through FSCS but are still around £20,000 down.
“There were a lot of sleepless nights,” said Mrs Todd, 66.
The Taylors will be sentenced in April.
• Copy supplied by the Eastern Daily Press.