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FCA takes on introducers behind £86m in pension transfers

The FCA has revealed it is pursuing two unregulated introducers involved in the transfer of at least £86m in pension assets from over 2,000 customers.

In the watchdog’s monthly round-up, FCA executive director for enforcement and market oversight Mark Steward discusses how the FCA is approaching fraudsters as a new advertising campaign launched earlier in the week by the FCA and The Pensions Regulator to combat scams.

The campaign is aimed at pension savers aged between 45 and 65 and this is the group Steward says is most at risk.

He quotes research commissioned as part of the campaign which shows nearly a third of pension savers in that age group do not know how to check if they are speaking with a legitimate pensions adviser or provider.

It also reveals one in eight pension holders aged 45 to 65 are likely to trust an offer of a free pension review.

Steward notes the free pension review is a tactic frequently used by scammers to lure pension savers into a scam.

He says the regulator usually finds unauthorised pension activities are very often linked to these types of pension scams in the reports it reviews.

He adds the FCA is seeking injunctions, declarations and restitution orders to prevent further breaches in schemes which were unlawfully promoted to the public using false, misleading and deceptive statements.

The campaign has been criticised by former pensions minister Ros Altmann who says the FCA should ban firms from using leads generated by cold-calling to better protect the public, a tougher approach in general is needed towards pension scams.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. It is a sad fact that the companies perpetrating these frauds, by the time the FCA become involved, have already taken the money and are now in liquidation or administration.

    The individuals involved (bearing in mind in most cases they were well aware of the nature of the business they were in) are unlikely to be available to be prosecuted or simply line up to take any punishment the FCA and courts want to dish out.

    • Just because a pension case has come via an Introducer does not mean its fraudulent.
      And the people referred to by the FCA are more likely to be lead generators rather than introducers anyway.

  2. But, if not via a regulated intermediary, where is the money going? No authorised provider will (or at least shouldn’t) accept a transfer via an unauthorised intermediary and scheme trustees shouldn’t release money to an unregistered pension arrangement.

    On this basis, responsibility for any unsuitable transfers lie with regulated intermediaries.

    Hence Ros Altmann’s call for the FCA to ban firms from using leads generated by cold calling. Were such a measure enacted, unregulated introducers would have nowhere to which to pass on their leads.

  3. About.
    XXXXXXX
    Time.

    Whilst the other commenters are right, that venal, greedy, and above all naively stupid regulated advisers are part of the problem – and Ros Altman’s proposal to ban such leads could go a very long way to fix the issue – nonetheless it is heartening to see the FCA finally, finally begin to flex its not inconsiderable muscle against the actual criminal ‘masterminds’.

  4. Richard Anderson 17th August 2018 at 10:11 am

    I’m glad that the FCA are looking into this, and indeed would be pleased if they looked into the wider interaction between introducers and regulated advisers. I think there may be a large number of individuals, or firms, who are sitting ‘under the radar’, taking significant introducer fees, perhaps akin to commission sharing deals of old, but just by another name. We are still not as professional as we should be. If an adviser can’t, or doesnt wish to, provide a particular service (whether its occupational pension transfers or anything else) they should either say that they cant help or refer to someone reputable, on whom they have carried out robust due diligence. Such a referral should not warrant a fee of any significance, if indeed any fee at all. Un-regulated individuals should not be dealing with, or influencing, regulated products/services in any way, and product providers should not take any instructions from them.

    Also, selling ‘leads’ for financial services should, IMHO, be banned. A cold calling ban would not address the problem, or impact on these leads, because the adviser would claim to be responding to an enquiry, not making a cold call.

  5. In connection with a scheme of which I am a Trustee I recently had cause to check with the FCA register to see if an intermediary requesting a substantial transfer for a member was authorised. The register said that the firm was authorised to advise on pension transfers and opt outs but showed a temporary restriction on transacting transfer business. The intermediary said that the restriction no longer applied. I called the FCA to check out the situation but could not get confirmation as to whether the restriction still applied. To be honest they did not appear to understand the point. I decided not to allow the transfer.

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