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Concerns over 16% commission pension transfer scheme

Advisers have urged caution over a scheme advertising 16 per cent commission rates on pension transfers for people aged 55 and under.

Pension Solutions, which acts as an introducer to a panel of IFAs, claims on its website a man with a £60,000 pension pot can “earn” £9,000 in commission by shifting his fund into a new pension plan. (Website has been taken down following the publication of this article.)

The firm says a fixed one-off fee of £3,750 is charged before the 16 per cent commission is paid to the customer.

The company says the commission does not come out of the client’s pension fund.

The Pension Solutions website also claims projected growth on the scheme’s investments is 9.2 per cent a year.

Pension Solutions managing director Danny Coughlan declined to comment on the new fund or give details of the IFAs on its panel.

Informed Choice managing director Martin Bamford says: “This is a terrible deal for the customer and could be in breach of HMRC rules on pension commencement lump sums. The commission paid to the customer could be considered an unauthorised payment and the pension fund could suffer significant tax penalties as a result.”

Hargreaves Lansdown head of advice Danny Cox says: “This is absolutely horrendous and any IFA using this firm to generate leads should be ashamed of themselves.

“The approach is misleading and wrong on so many levels. How can an adviser justify paying 16 per cent commission? It is outrageous that this firm can bypass FSA rules on advertising and use over-egged growth rates to lure people in.”

An FSA spokesman says: “Anyone considering taking money from their pension by unlocking some of their retirement pot early should treat any schemes that offer the chance to do so with extreme caution.

“Anyone who accesses money from their pension, either via a loan or other ways outside of the normal allowed methods, runs the risk of having to pay unauthorised payment charges.”

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Comments

There are 28 comments at the moment, we would love to hear your opinion too.

  1. Come on FSA earn your money andsort it out if its not compliant!!

  2. Have looked at this website and
    *it’s has a cheap and shoddy construction
    *it makes a bogus claim (we are firm of IFAs – well, not according to the FSA Register)
    *it offers no indication of a business address

    All the classic hallmarks of a scam really.

    Luckily, an FSA spokesman said people should “treat any schemes that offer the chance to do so with extreme caution”

    Oh, that’s ok then.

    What I want to read is ‘an FSA Spokesman said “we are looking at this organisation urgently and will be taking action, in conjunction with any relevant law enforcement agencies, as we conclude is appropriate”

    Just what sort of watchdog have we got here?

  3. Why doesn’t the FSA’s response say “thanks for letting us know, we’ll put a stop to this straight-away”, surely this is what they should be doing. What will probably happen is that lots of people will make complaints when they realise they’ve been mis-sold, the culprits will no longer exist and the IFAs that had nothing to do with it will get bills from the FSCS to repay the people who’ve lost money. Great.

  4. “Why doesn’t the FSA’s response say “thanks for letting us know, we’ll put a stop to this straight-away”, surely this is what they should be doing.”

    Not really.

    What they should be doing is asking the question “How do they manage that?” and then investigating and analysing before coming to a conclusion.

    Of course this is what the FSA do not do, for the fundamental reason that they seem to be incapable of doing that which they should.

    Ian Coley
    Partner
    Medical Investment Services

  5. What we need, Money Marketing, is a notice board on line where these kinds of scams can be flagged up in the public domain so that the FSA and all who come after her cannot say that they were not informed. Come on it has to be a winner for you. Set up a complaint sector.

  6. I’ve mentioned this before on here, but over the last couple of years I have reported:

    – theft commited by an “adviser” of over £100k
    (police weren’t interested either)
    – a SIPP scheme being promoted by a non authorised employee (an engineer actually) to co workers where he received a 5% kick back on any arranged
    – what looked very like a pyramid scheme being sold as a retail investment

    The above has come about as part of my day to day work as a day to day IFA and I am sure we all see similar quite often.

    In each case guess what the FSA did?

    Nothing.

  7. FSA ! What they should be doing and what they are doing are so diversified from the original concept and intentions of the FSMA I doubt if anyone at the regulator really knows what the blazes is going on in our industry. While they are going after small IFAs and trying to put us out of business via the RDR, they took their eyes off the real rogues in our industry which caused the recession.
    The regulator nominates a firm of providers (KIS Ltd) as an intermediary when in fact they were not authorised to sell their products direct to the public only through IFAs.
    Where is the common sense in this organisation, are they so up their own backsides, puffed up by their own alleged self importance that they cannot or refuse to see what is going to happen and how millions of policyholders are going to be left in the mire without an IFA to consult, because it will be too expensive

    Is that what we have come too?

  8. Not sure if anyone has done a whois by the way, but the site is operate by “Reverse Claims Ltd”. Registered on 24th Nov 2011.

    Lots of other information is publicly available for the site if you look.

    I bet the FSA don’t even know what a whois is.

  9. They seem to be able to help with all of a clients needs. They are also:

    http://www.claim4more.com/
    &
    http://www.reverseclaims.com/index.php

  10. Who are the IFAs involved in this scheme? They should be named and shamed.

    Why are they involved in this scheme? Is it due to ignorance, greed, desperation or trying to impress clients with something sophisticated?

    Which SIPP providers are facilitating this scheme?

  11. MJ | 2 Feb 2012 9:20 am

    Why doesn’t the FSA’s response say “thanks for letting us know, we’ll put a stop to this straight-away”, surely this is what they should be doing. What will probably happen is that lots of people will make complaints when they realise they’ve been mis-sold, the culprits will no longer exist and the IFAs that had nothing to do with it will get bills from the FSCS to repay the people who’ve lost money. Great

    ANSWER – Because the only proactive thing the FSA has ever done is RDR, and look at what a mess it all is. It suits them to take this line, afterall they have to allow this sort of thing to happen before they act to secure their future employment.

  12. Well I just phoned the number on the website to give the rogues behind this a piece of my mind and it rang out unobtainable. Hopefully they’ve crawled back under their rock, for the time being at least

  13. Come on guys get the FSA’s back. They are far too busy with RDR to worry about things like this. Hector can say in a few years sorry it wasnt my fault I had other things to do and can not be in all places in one time. If this ends up being the scandal it looks like there will be loads of FSCS involvemnet and we can all look forwrd to another levy. Hector get your finger out and sort this NOW!!!

  14. David Trenner - Intelligent Pensions 2nd February 2012 at 10:23 am

    Well done Tom. The website has been taken down in the last few minutes. About 90 minutes after you posted your report!

  15. This is not the only dubious scheme on the market in respects to SIPP. In Essex and Suffolk there’s a firm called Harlequin who are not even authorised and regulated by the financial services authority who advertise Caribbean property to be sold through a SIPP. We even reported this to FSA and the Inland Revenue in response we got back is that it is the responsibility of the IFA to check whether these types of properties can be held within a SIPP. I felt that this was absolutely terrible as it is only a 55% tax charge if the revenue decides the investment is an unauthorised one.

    Surely it is the responsibility of the FSA to convict and stop individuals or firms operating outside of the financial services marketing act 2000. I’ve even seen representatives of this firm at networking events giving full details of how you can hold this type of property in a SIPP with no authorisation.

    We obviously need a regulator to tighten up the rules on what can and cannot be done and to take greater interest in products.

  16. This situation is completely disgraceful. Unfortunately the less well informed sensationalist press will tarnish us all with the same brush. This is wrong so come on FSA do the job you are actually supposed to do for once. However, none of us are holding our breath !

  17. Martin Bamford

    “Which SIPP providers are facilitating this scheme?”

    I see no mention in the artice about SIPP providers facilitating this? Where did you read that?

    Thanks.

  18. The US Marine Corps has a saying for such unacceptable situations

    “kick arse and take names in that order”

    Seems ok to me

  19. @Pensionman

    After reviewing the website, which I understand has now been taken down, we reached the conclusion that the scheme worked as follows:

    Customer introduces himself to promoter, promoter introduces customer to panel IFA, panel IFA transfers customer pension fund into SIPP with £3,750 implementation fee paid to IFA, panel IFA invests SIPP fund in UCIS paying 20% commission to IFA, scheme promoter receives introducer fee from panel IFA, scheme promoter pays 16% ‘commission’ to customer.

    We cannot think of a way such a process could be facilitated without the involvement of a) a regulated IFA, and b) a regulated SIPP provider.

  20. Martin Bamford

    Thanks for the explanation – I never got a chance to have a look at the website.

    I do feel that some naming and shaming is in order in this case.

    Quite how a reputable provider and IFA would allow this is beyond me!

  21. I did a google search for Danny Coughlan – found the site below, dont know if its the same one, but anyway what an insight into the world of claims chasers….extraordinary bunch

    http://www.a4uleads.com/archive/index.php/t-3747.html?s=bc79c94b9f30e4b52f8e0d11df9f8e61

  22. Don’t criticise the FSA. You know the poor dears can normally only look at one thing at a time. Currently they are protecting their backsides by looking at Banks and RDR. Two things at once is stretching their abilities and excuses to breaking point. Asking them to regulate matters such as this is really being cruel. Of course they could ask for a 15.6% pay rise in order to get another member of staff who could look after this irritating stuff.

  23. Pension Solutions 2nd February 2012 at 3:39 pm

    To whom it may concern,
    We have removed the investment opportunity from the website owing to the miss-representation of the offering by Money Marketing.
    We will endeavour to contact the fore mentioned publication and to include the actual offering made and seek a correction of the incorrectly publicised investment opportunity.
    The commission stated related to the appointment of INTRODUCING AGENTS. It is not offered or intimated to direct investors. We believe this is a misunderstanding where INTRODUCING AGENTS agreement terms are confused with that of direct investors.
    This offer is revoked with great disappointment as we believe this offers a truly reasonable return of investment for investing consumers.

  24. Pension Solutions | 2 Feb 2012 3:39 pm

    “This offer is revoked with great disappointment as we believe this offers a truly reasonable return of investment for investing consumers.”

    Well tell us all about it then!

  25. @Pension Solutions

    So your offer is moving from breaking HMRC rules on tax-free cash to simply being a rip-off? What person in their right mind would invest in a scheme that pays 16% commission?!

  26. @Anonymous 4.01pm

    Anyone who’s ever invested with St James’s Place, maybe?

  27. That Danny Coulghlan is a shark! Hes been around in and around the claims industry with his sidekick Paul Psaila for a while ripping people off for various products. Just Google his name and you’ll see!

  28. Danny Coughlan is a no good PPI claims scammer. Keep away from him

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