If you weren't able to read my Pensioners Platform column in the June-July 2014 edition of the Torbay Times, here it is:-
THE CITY regulator has warned that the over-55s are being targeted by
cold callers who are falsely claiming to offer “new, free, government-backed
retirement guidance.” If you receive a call or email, or see an advertisement
that makes such a claim: ignore it. If you don’t you could be conned and end up
putting your pension savings into risky investments and losing the lot!
The Financial Conduct Authority (FCA) has alerted consumers to beware of phone calls, emails, text messages and online adverts offering them a “free pension review” which encourages them to move their pension to “get better returns”. The regulator said it had heard evidence that some telephone cold callers were claiming to represent the government after the Chancellor of the Exchequer announced plans in the recent Budget to offer impartial face-to-face guidance on the range of options people had available for their pension pots.
In reality, that guidance has not yet been launched. Instead, it will coincide with plans from April 2015 to give people aged over 55 the freedom to take their pension pot however they see fit.
The FCA alert added that, as the new guidance initiative was still at the developmental stage, any claims of a link to it are highly unlikely to be true. The regulator went-on to explain these “reviews” were designed to persuade you to move your money out of your existing personal or occupational pension into a self-invested personal pension (SIPP) or a small self-administered scheme (SSAS).
From there, the pension pot is likely to be invested in unregulated investments such as overseas property developments, forestry or storage units. Unregulated investments can be very high-risk with returns that are potentially unreliable. Indeed, the FCA stressed that, for most individual investors, putting pension money into unregulated investments is unlikely to be in their best interests. Moreover, such investments are also often very difficult to sell.
Most of the companies making these offers are not authorised by the FCA. Nevertheless, the regulator pointed-out that the companies concerned often falsely claimed they are acting on its behalf. This is not true! The FCA also warned that people investing in this way are likely to find they have no safety net to fall back on if something goes wrong. This would include no right to complain to the financial ombudsman, and no right to claim money back from the Financial Services Compensation Scheme (FSCS). Indeed, the regulator said it was unlikely that the ombudsman or the FSCS would be able to help someone who loses money as a result of dealing with an adviser who was not FCA-authorised.
Even more importantly, the FCA pointed out that authorised financial advisers who had their clients’ best interests at heart were very unlikely to be offering such a service, because professional advice on pensions is not free.
The Financial Conduct Authority (FCA) has alerted consumers to beware of phone calls, emails, text messages and online adverts offering them a “free pension review” which encourages them to move their pension to “get better returns”. The regulator said it had heard evidence that some telephone cold callers were claiming to represent the government after the Chancellor of the Exchequer announced plans in the recent Budget to offer impartial face-to-face guidance on the range of options people had available for their pension pots.
In reality, that guidance has not yet been launched. Instead, it will coincide with plans from April 2015 to give people aged over 55 the freedom to take their pension pot however they see fit.
The FCA alert added that, as the new guidance initiative was still at the developmental stage, any claims of a link to it are highly unlikely to be true. The regulator went-on to explain these “reviews” were designed to persuade you to move your money out of your existing personal or occupational pension into a self-invested personal pension (SIPP) or a small self-administered scheme (SSAS).
From there, the pension pot is likely to be invested in unregulated investments such as overseas property developments, forestry or storage units. Unregulated investments can be very high-risk with returns that are potentially unreliable. Indeed, the FCA stressed that, for most individual investors, putting pension money into unregulated investments is unlikely to be in their best interests. Moreover, such investments are also often very difficult to sell.
Most of the companies making these offers are not authorised by the FCA. Nevertheless, the regulator pointed-out that the companies concerned often falsely claimed they are acting on its behalf. This is not true! The FCA also warned that people investing in this way are likely to find they have no safety net to fall back on if something goes wrong. This would include no right to complain to the financial ombudsman, and no right to claim money back from the Financial Services Compensation Scheme (FSCS). Indeed, the regulator said it was unlikely that the ombudsman or the FSCS would be able to help someone who loses money as a result of dealing with an adviser who was not FCA-authorised.
Even more importantly, the FCA pointed out that authorised financial advisers who had their clients’ best interests at heart were very unlikely to be offering such a service, because professional advice on pensions is not free.
Tracey McDermott, director of enforcement and financial crime at the FCA
said, “People should be very wary if they are contacted out of the blue by
someone offering a ‘free pension review’. Most of the companies offering this ‘service’
are not authorised by us, and we’re concerned that the reviews often end-up
with pension pots placed in higher-risk, unregulated investments. If you see or
receive an offer of a ‘free pension review’, just ignore it. If you are called
out of the blue to discuss your pension, just hang up. Your pension is far too
important to be put in the hands of a cold caller.”
The FCA said people who were considering reviewing their pension arrangements should consider getting independent advice from an authorised financial adviser. Consumers can check if the adviser is authorised by the FCA and, therefore, allowed to give pensions advice by going on-line to www.fca.org.uk/firms/systems-reporting/register.
You can also ask firms for their “firm reference number” plus contact details and then call the firm back on its switchboard number shown on the register, rather than call on a suggested direct line. If there are no contact details on the register or the firm claims they are out of date, you can contact the FCA’s consumer helpline on 0800 111 6768.
Footnote: If you have already moved your pension pot and have concerns, you should firstly take the matter up with any authorised firms that were involved. The ombudsman might be able to help if you cannot get the matter resolved with an authorised firm.
The FCA said people who were considering reviewing their pension arrangements should consider getting independent advice from an authorised financial adviser. Consumers can check if the adviser is authorised by the FCA and, therefore, allowed to give pensions advice by going on-line to www.fca.org.uk/firms/systems-reporting/register.
You can also ask firms for their “firm reference number” plus contact details and then call the firm back on its switchboard number shown on the register, rather than call on a suggested direct line. If there are no contact details on the register or the firm claims they are out of date, you can contact the FCA’s consumer helpline on 0800 111 6768.
Footnote: If you have already moved your pension pot and have concerns, you should firstly take the matter up with any authorised firms that were involved. The ombudsman might be able to help if you cannot get the matter resolved with an authorised firm.
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