One of the unwelcome side effects of recent pension reform has been increased opportunities for fraudsters and scammers to trick unwitting individuals into transferring their pension into unsafe or non-existent investments from which you could lose all your money.
Below is an 8-point plan to help protect yourself.
- If you are contacted unexpectedly by a cold caller about an investment opportunity, the best thing to do is hang up.
- Tell-tale signs of a dodgy investment proposition include pressure to invest quickly, because the opportunity is only open for a limited period, and the promise of returns that sound too good to be true. Remember there is no such thing as a safe investment offering high guaranteed returns.
- Check whether the firm which contacted you is authorised by the FCA. You can do this by checking the FCA Financial Services Register online or call the FCA’s consumer helpline on 0800 111 6788.
- If you invest through an unauthorised firm you will not be covered by the Financial Services Compensation Scheme if things go wrong and so have little chance of getting your money back.
- There is a FCA warning list to check if a firm is known to be offering investments without FCA authorisation. The list is not comprehensive as firms can change names and details; but if it is on the list it is a clear warning sign to avoid.
- If you are think you may have given your bank details to a firm, contact your bank immediately
- If you have agreed to transfer your pension and suddenly feel uneasy, tell your pension provider right away. It may be able to stop the transfer.
- Always get independent advice from a FCA authorised financial advice firm before investing or changing your pension arrangements. You can find a list of suitable advisers on unbiased.co.uk or vouchedfor.co.uk.
To summarise, you must be diligent and ensure you do your research before choosing to work with any financial adviser. Check the FCA register, check on Companies house how long they have been trading, check their website and whatever else you can and if you are not 100% sure about them, simply walk away.