Pension Scams

21st Mar 2017

A new client recently came to see us. His previous adviser had recommended an unauthorised investment and now he has a copy of the Administration Notice from the administrators.
For most people a pension, whether it is a workplace scheme, a Personal Pension or a SIPP (Self Invested Personal Pension) this will possibly provide a significant part of their income in retirement.
However, we are seeing more and more examples of exotic investments, scams and bad advice that could seriously damage your wealth in retirement.
So far this year we have heard of clients, being offered a whole range of weird and wonderful investment schemes, including car parks in Dubai, fractional ownership of hotel rooms, burial plots, social housing in Brazil, care homes in Germany and ownership of land all over the world.
Many of these ‘the best investment opportunities ever’ are often advertised with the promise of high, guaranteed, returns and come in two distinct forms.
The first are called Unregulated Collective Investment Schemes (UCIS). These types of investment, which often include property or land, can only be marketed by FCA (Financial Conduct Authority) regulated advisers to suitable investors. Furthermore the suitability of an investor needs to be established before the investment is offered to them.
The second type are also unregulated, but marketed by companies who are not FCA regulated.
In the case of a UCIS investment the client may be able to make a complaint against their regulated adviser if things go wrong. There are also institutions to call upon, such as the Financial Ombudsman Service and the Financial Services Compensation Scheme if the regulated adviser, who sold you the investment, is no longer in business.
However, in the second scenario, where the investment was bought from an unregulated adviser, there is no protection from anyone whatsoever.
Before buying an unregulated investment we would suggest you tread very cautiously and take advice, preferably from someone who has no vested interest in you investing in these investments.
Firstly protect yourself by never buying an investment with an unregulated ‘adviser’, always make sure you take advice from someone regulated by the FCA . If you buy an investment from an unregulated adviser and it goes wrong, as these frequently have in the past, you can complain to no-one.
If you are considering or feel pressured into investing in one of these investments then stop, pause and reflect on whether you are doing the right thing.
Take a second opinion, find an FCA authorised Chartered Financial Planner and let them review the advice you are being given.
The Pensions regulator has given some very useful guidance on its website which you can find here:
We are here to help. If you would like a second opinion or just want to run this past someone else outside the family or the workplace please do not hesitate to call one of our team today on 0116 254 2255 or email