Financial advisers who recommended retirement savers to switch out of a direct benefit pensions are coming under the scrutiny of consumer watchdogs.
The Financial Conduct Authority (FCA) is looking at the quality of advice offered by several IFAs when savers were offered enhanced transfer values to leave a workplace scheme.
The FCA has looked at more than 300 cases and found that ibn three out of four cases, the advice offered to the saver was unsuitable.
The concerns cover ‘insistent’ pension savers who were keen to take the cash offer and move without considering the wider impact leaving a direct benefit scheme would have on their retirement benefits.
Now the FCA is thought to be urging firms who gave unsuitable advice to contact their customers and offer compensation.
Pension savers who want to give up rights under a direct benefit scheme are a quandary for advisers and regulators.
Around 35,000 direct benefit savers a year look to transfer, mainly to move their retirement cash into another fund offering flexible access, while just over 7,000 advisers are qualified to give recommendations about transfers.
The government and FCA both require direct benefit pension savers to obtain advice before switching funds, but the FCA has stated in the past that a transfer was only suitable for a small number of consumers.
Warnings about bogus advisers – Worldwide
No new warnings were posted this week on the International Organisation of Securities Commissions web site
Warnings about bogus advisers – UK
Here are the latest bogus financial advisers listed on the Financial Conduct Authority (FCA) web site:
- Wattford Capital Partners
- Triarc Financial
- Ebor Option (Ebor Trustees Limited) (Clone web site)
- Aldershire Limited/ Aldershire Capital/ Aldershire Global Trading
- Helmut Studer (Clone web site)
- South Coatbridge Credit Union Bank (Clone web site)
- Industrial and Commercial Bank of China (Clone web site)
- Ebor Trustees Limited (Clone web site)
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser