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Retirement

Ignore ‘free pension advice’ offers, warns city regulator

Lucinda Beeman
Written By:
Lucinda Beeman
Posted:
Updated:
21/05/2014

The Financial Conduct Authority (FCA) has warned consumers to ignore cold calls, emails and online advertisements offering ‘free pension reviews’ as they are likely to be scams.

While some cold callers claim to be acting on behalf of the FCA or the Government, most are not, the regulator said. 

Rather, these ‘reviews’ are designed to persuade people to move their pensions into a self-invested personal pension pot (SIPP) or a small self-administered scheme (SSAS).

From there the funds are invested in unregulated investments like overseas property developments, forestry or storage units known as store pods.

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 with pension pots placed in higher-risk, unregulated investments.”

According to the FCA, returns in higher-risk investments can be unreliable, the investments can be difficult to sell and investors could lose everything they invested.

Investors may also have limited protection if something goes wrong. The FCA warns that it is unlikely that the Financial Ombudsman Service or the Financial Services Compensation Scheme will be able to help if money is lost as a result of dealing with an unauthorised adviser.

McDermott said: “If you see or receive offers of ‘free pension reviews’, just ignore them. 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 it is very rare for a legitimate financial adviser to cold call customers, nor are their services free.

If you receive an offer you are unsure about, check the FCA’s list of registered advisers here.