How to avoid a pension scam
It’s easy to tell a legitimate financial adviser from a scammer when you know what to look for.
How do I know if I can trust a financial adviser?
The easiest way to find out if a financial adviser is legitimate is by checking the Financial Conduct Authority (FCA) register. Regulated financial advisers must be registered with the FCA, so if they are not listed then they are not authorised to provide advice. Scammers may try to trick people that they are authorised advisers, so it is important to check. If you are contacted by a company offering financial advice or services but they are not on the register, you should avoid dealing with them.
In case you’re wondering, Portafina Investment Management Ltd’s FCA registration number is 754580.
Where can I get financial assistance?
The government launched Pension Wise, a free retirement guidance service, earlier this year. Provided by the Citizens Advice Service and the Pensions Advisory Service, it explains the available options at retirement, but does not offer actual advice or personal recommendations. Unbiased and vouchedfor.com both list regulated advisers.
Your questions answered
Do regulated financial advisers advertise online and by post?
Absolutely. Like any business, regulated financial advisers advertise in many places and they must show their FCA registration number on all marketing materials. If there is no FCA number, then it’s best to steer clear. And a legitimate financial adviser will not cold call you to offer risky investments.
Do regulated financial advisers offer free pension reviews?
Yes. It makes accessing financial advice fairer for everyone. As part of your review the adviser should tell you how much it would cost if you ask them to act on your behalf. Or, you can walk away fully informed with nothing to pay. The golden rule is to make sure the adviser is registered with the FCA.
Will a financial adviser push me into risky investments?
No. If a company is telling you to put your money into an overseas scheme or wine, it is likely to be some sort of scam. Pension portfolios should hold a range of investments specific to your situation and a regulated financial adviser will never pressure you to make an investment that you do not feel comfortable with.
Can I release money from my pension before I’m 55?
No. You cannot take money from your pension until you reach 55, except in extremely rare cases. Many scammers will say that you can take a loan from your pension or release money via a legal loop hole. This is known as pension liberation and could end up wiping out a large proportion of your pension savings.
Can I report a company I think is offering scam investments?
Yes! Firstly, you can check the FCA’s ScamSmart warning list to see if the investment is already listed. Secondly, you can report any company you think is a scam to Action Fraud by calling 0300 123 2040.
Are there many scams?
Yes! Although it is impossible to have an exact number, there are many scams to watch out for and it is possible for some to appear in Google’s paid adverts. Many people are not confident that they could tell a scam from a legitimate financial offer, though, and evidence suggests people are more likely to be targeted by scams when they are aged 55-59. Always check a company is regulated and then you are protected.
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10 ways to avoid a finance scam
- Ensure the company is real and legitimate
- Don’t supply banking or credit card information
- Be wary of unrealistic claims
- Don’t send any money
- Ask questions
- Don’t feel pressured or obligated
- Beware the fluency
- Beware “guaranteed returns”
- Don’t believe everyone else is doing it
- Pay attention to the little details