Financial Conduct Authority chief executive Martin Wheatley is cracking down on adviser firms that work with pension liberation schemes.
Speaking at an FCA financial crime conference in London today, Wheatley said regulated firms can give liberation schemes the “veneer of respectability”.
Wheatley highlighted huge increases in liberation attempts this year at Friends Life and Phoenix.
He also warned about the damaging impact it can have on pensioners.
He said: “As part of our prevention work the FCA is investigating how to protect pension pots on top of the work being done by police, so we can clamp down on the directions of advisers and firms who give pension liberation the veneer of respectability. It is important work for the FCA but also for firms to be alive to the dangers of pension liberation and be quick to pick it up.”
FCA director of crime and enforcement Tracey McDermott echoed Wheatley’s warning to advisers on liberation schemes in a later speech.
McDermott said: “The involvement of authorised firms in these schemes can given them an air of unwarranted legitimacy.
“Anyone involved in this market needs to look very carefully at what they offer to their clients and how they advise them. You should have no doubt we will take seriously if you fail to do so.”
McDermott’s speech echoes earlier comments made at a conference last month, where she told delegates the regulator was scrutinising the role of advisers and providers in pension liberation schemes with The Pensions Regulator and HM Revenue & Customs.
A number of providers, including Aviva and Friends Life, say they have experienced a significant increase in transfers to “high risk” schemes in recent months.
The Pensions Regulator has said it is considering introducing a pension liberation “watch list” as part of a clamp-down on fraudulent schemes.