Pension Scams – remove the sting!
There are lots of cases in the news where pension schemes are being used to buy fraudulent investments. Clients can lose large amounts of their pension pots and unfortunately, sometimes all of them.
Scammers are very clever nowadays and can appear to be legitimate financial advisors.
To help you spot a pension scammer, here are some tips:
- Cold calling, text messages or emails
- Companies should never call you for a pension review; if a company calls you and you do not have an established relationship with them, do not speak to them before you carry out thorough research on that company.
- Are they regulated by the Financial Conduct Authority (FCA)?
- Any company or individual who gives advice must be regulated by the FCA. You can check the FCA register here: fca.org.uk/register
- There is no such thing as a guaranteed return
- You can never guarantee that you will receive a return on your investments because the market can clearly fall as well as rise and there is always some element of risk attached to an investment. Therefore if any advisor promises that you will receive a guaranteed or ‘absolute’ return (especially in excess of 8%) query it and do some research.
- There is no need to rush
- Don’t full pressurised into making a decision. Make sure you investigate the investment clearly and carry out research and checks to ensure that you are comfortable with the choice you are making. Are you happy with the risk level? Are you able to access returns or is the investment locked away for years? Consider your lifestyle and your own personal investment objectives. Most scammers will send a courier to your door with application forms for your signature and they will not leave until you have signed on the dotted line – turn them away or report them to the FCA if you are made to feel under pressure or sign in this way.
- Financial incentives.
- If the ‘advisor’ claims that by signing up to a particular investment means that you will receive a cash bonus or can access cash from your pension scheme before the age of 55, refuse to sign. Both of these things are against pension rules.
- Do your own research
- Look into everything yourself and do your homework, in your own time. Make sure that your advisor is FCA-regulated, that you feel comfortable working with him or her and that the investment in discussion is the right one for you.
For further details on pension scams you can visit ww.pension-scams.com or call the pension advisory service on 0300 123 1047 for free pensions advice and information.
There is also a downloadable PDF document on pension scams at http://www.thepensionsregulator.gov.uk/docs/pension-scams-booklet-members.pdf