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FCA warns on unauthorised firms offering Budget guidance

The FCA has issued a warning to consumers over cold calls from firms offering a ‘free pension review’.

The regulator says some firms are claiming to represent the Government in its at-retirement guidance service announced in the Budget.

The FCA says it has evidence that people are being contacted unexpectedly through phone calls, texts and text messages by unauthorised firms.

The firms offer a pension review and encourage consumers to move their pension to ‘get better returns’.

The FCA says the reviews are designed to persuade consumers to move their pension to a self-invested personal pension or a small self-administered scheme.

The pension pot is then typically invested in unregulated investments like overseas property developments, forestry or storage units known as store pods.

FCA director of enforcement and financial crime Tracey McDermott says: “People should be very wary if they are contacted out of the blue by someone offering a ‘free pension review’.

“Most of the companies offering this ‘service’ are not authorised by us, and we’re concerned that the reviews often end with pension pots placed in higher-risk, unregulated investments.
“If you see or receive offers of ‘free pension reviews’, just ignore them. If you are called out of the blue to discuss your pension, just hang up.”  


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There are 29 comments at the moment, we would love to hear your opinion too.

  1. Instead of ‘warnings’ which the public are unlikely to see why not take direct and swift action against these people?

  2. I welcome this move from the FCA but when are they going to ban all marketing firms touting for financial leads without authorisation.

    Surely by enforcing authorisation rules you solve the problem.

  3. I can’t remember how many I have reported to the FCA and as the firms are usually stupid enough to phone and continue talking even when they’ve rung our office number, I have on several occasions played along and then sent the recording and a screen print of the firms website to the FCA. I even managed to work out what building the call centre were working out of and reported them to trading standard too, but these things just keep on happening.
    What;s annoying is there is often a tame IFA in the background organizing the pension transfer switches on a “Non advised” basis for the investment and just advising on the tf. That’s all fine and dandy until the permissions of the IFA firm are then removed, complaints start hitting the FSCS and all of us who aren’t doing shed loads of UCIS ended up picking up the bill.
    As an IFA, I am NOT anti UCIS, but I am 100% with the FCA on the fact that for the majority of retail clients they are just not suitable.

  4. Christine Brightwell 21st May 2014 at 10:38 am

    This is the same as the calls in respect of pension liberation, just not offering to provide an immediate pay out.. Move your pension pot and get better results – that the someone else can liberate the pension into their own pocket. Nice. I would hazard a guess that it will be the same people calling.

  5. How can you stop all these organisations – which are generally only a guy in his bedroom or rented office space with a diffrent phone number each week and no company address.

    Its like saying, ‘why dont the police just arrest all the drug dealers’

    Because its impossible.

  6. Here we go again!

    I thought ‘Guidance’ was unregulated. Definitions, definitions. Are they being hoisted by their own petard?

  7. Whilst I agree with Peter Herd’s suggestion that marketing for financial leads should be banned outright. This is unlikely to deter those involved who clearly have such scant regard for the legislation that already exists

    Despite being TPS registered, I get numerous calls and texts from these people and like Philip Castle I track the source as far as I can before reporting to the regulators. The problem is that many of them are single page websites and the work involved in tracking them down is disproportionate to the likelihood of anything being done about it..

    So instead I keep the numbers that they call me from and fill in the enquiry screen on the website with the phone numbers of other firms doing the same thing in the hope that their diallers will grind to a halt calling each other

  8. @Harry – Perhaps Keith Richards would care to comment on here, you can’t have it both ways.

    Authorised REGULATED advisers stance on this is clear and the PFS hierarchy needs to get in FRONT if it’s members and not have to be forced in front from behind.

  9. Exasperated Me 21st May 2014 at 11:13 am

    My banks keep calling to tell me I am due for a “review”, PITA!!

    But, the regulators offer advice without qualifications or liability.

  10. As Matthew has pointed out, trying to police this would be nigh on impossible, maybe just maybe ? the FCA and our trade bodies should try a difference tack

    Advertise and shout out about the good sense to seek the advice from a independent adviser !! and tell them how to check if they are who they say they are, this is the only way, and yes you may have to pay but is this worse than the loss of all your investments ?

    People hear a lot of how to complain and get compensation from our regulatory sources, no wonder people listen to these charlatans and CMC’s, never do you hear of the good we very often do !!

  11. If its wrong for the regulated IFA surely its wrong for the unregulated so called adviser.
    Reporting the person to the police should be enough to bring criminal charges against them.
    This is fraud on a large scale. The question is why is there nothing done about it by the authorities?

  12. Julian Stevens 21st May 2014 at 12:16 pm

    So why isn’t the FCA actually DOING SOMETHING like going after these rogue firms? Thanks to folk such as Phil Castle, it knows who they are and where they are.

    Or is it more fun to nitpick at the client risk profiling processes of authorised intermediaries who, for the most part, aren’t doing anyonre any harm at all?

  13. This is just a test

  14. DH is right, you need to accept that finding and bringing all these firms to account would be impossible and/or cost millions. The only reasonable way to atack this would be via education of the public. Although this would be costly, as in order to have any desired impact, a dedicated campaign is required.

  15. I thought I would just remind people of the statutory objectives of the FCA which appears on their website:

    “Our strategic objective is to ensure that the relevant markets function well.

    To support this, we have three operational objectives:

    • To secure an appropriate degree of protection for consumers.
    • To protect and enhance the integrity of the UK financial system.
    • To promote effective competition in the interests of consumers.”

    If we take only the first one surely the FCA is still failing if they allow unregulated advisers and marketing firms to carry on practising without prosecution.

    I would also agree with DH comment on why the FCA is not spending some of its budget on educating the general public on the importance on getting independent financial advice from a registered financial adviser. Maybe they would like to spend some of the millions this spending on MAS.

    Isn’t it about time somebody on the Treasury select committee asked a basic question of the regulator what are you doing to protect consumers from unauthorised firms after all it is one of your statutory requirements?

  16. Philip Castle 21st May 2014 at 2:18 pm

    I would re[pear what Peter has said, but change one word “why the FCA is not spending some of its budget on educating the general public on the importance of getting delete (independent) financial advice from a registered financial adviser.”
    The priority is getting REGULATED advice, it is for us to argue the merits of independant, NOT the FCA. The are also arguments for restricted advice and for some clients it may be more cost effective (in part becuase of fear of the regulator connected to being Independant and a perception that demonstrating Independance is significantly worse than demonstrating suitability alone, which applies to both Independeants and Restricted advsiers).

  17. I have just had a very interesting conversation !!

    Just think of the kudos our (so called) trade bodies would get from a televised campaign on the virtues of regulated advice tell the consumer why we have gone through this RDR why we have all re educated ourselves and the pit falls of UN-regulated advice ?
    Now wouldn’t that get the subs rolling in, I say to you Richards, Hannant, and others don’t just sit there behind your desk playing with those swinging ball thingy’s (yes you know what in mean) bloody earn our respect !!!!

  18. Philip Castle 21st May 2014 at 3:06 pm

    @DH But that requires a hand in our pockets. Whilst I am willing to put my hand in my pocket for an agreed campaign, is everyone? The only way to do that is via either the PFS, IFP, IFS or APFA. I am currently a member of the first and last. But not of the second (dropped membership as delayed by CFP pending finishing my Diploma and now going on to AFPC and CFP after that) and haven’t been a member of the IFS since it changed it’s name from the Chartered Institute of Bankers, which was a long long time ago in a far away world..

  19. Hi Philip

    Every-one and their bloody uncle has a hand in my pocket which benefits them not me (I expect you are the same) this; however may do us some good, not said that for a long time, and in fairness what do they (trade bodies) do with our money anyway ? a few meetings, stale sandwiches, think up of new exams for us to spend our money on, the odd trip to the FCA and back again with their tales between their legs

    The thing is the only reason for my subscription to my “trade body” is the SPS cert, they/we need to demonstrate to the consumer, we are not a bunch of crooks or idiots contra to what the, FCA, CMC,s & others would have them believe.

    And like I implied; what do we really think of the trade bodies at the moment ? from my conversations and reading posts on here; not a lot !!! do we really see of them fighting our corner ? there is no point whatsoever of them keep going to the FCA just to be told sod off you annoying little oink all the time.

  20. Philip Castle 21st May 2014 at 4:19 pm

    To be fair to Keith Richards, he actually picked up the phone to me today after the postings on here.

    David Ross of the CII has done similar in the past

    Simon Webster has phoned me in the past after postings on here

    and even the good old FCA have phoned me after comments I made in the press. Unfortunately, the latter has ended up with somewhat of an argument with them over the common law right to a longstop which has been going on now with me for over 4 years, came to a head before Xmas and after lots of toing and frowing, because I will not back do what they say unless they can point to the bit in the rules that they want me to follow, I am now having a meeting with them at Canary Towers in a few weeks time.

    Blogging on here under your own name, can have it’s advantages (i.e. the nice call from Keith Richards) and t’s disadvantages (a VERY snotty letter originally from the then FSA, which they have been backtracking on after it’s legal irregularities were pointed out to them by a friend of mine)

  21. @ DH

    I think you may be confusing a Professional Body with a Trade Body. From your post I would guess that you are with the PFS. Well try the IFP instead. They actually do something for the money. They have very good seminar programmes (at extra cost) and they don’t tend to waste their time or money like the others.

    APFA is a Trade Body and although I was with AIFA for a long while and still continue with APFA I have to admit that I am beginning to wonder why I bother. Unlike many my concerns are somewhat different. I’m not obsessed with a Long Stop, it would be nice but I can think of plenty of other things I’d rather see them do instead.

    I don’t think it is appropriate here to list them all, but top for me would be for them to honour their promise of a collegiate approach and a division for INDEPENDENT advisers. (No surprise there, then!)

  22. I don’t care about trade bodies, I don’t care about people with vested interests, what I do care about is are the FCA carrying out its statutory objectives effectively.

    If they are not convicting individuals or firms for carrying out regulatory activity and surely they are breaking their own statutory objectives which is enshrined in law
    Last year I did a freedom of information request to the old FSA to see how many people they had convicted of un-authorised advice. Needless to say they tried to fudged the matter by stating that it took too much time to accumulate figures but what they did give me was quite shocking and MM did run an article on it.

    Needless to say this should be the one single issue that should unite all financial advisers whether restricted or independent.

    It is also a very simple one for the regulator to answer and I would hope that MM would hold Martin Wheatley and others to account on the subject.

  23. Maybe MM would like to ask Martin Wheatley when the FCA is going to run an ad campaign on the merits of regulated financial advice?

    After all it is their statutory objective to protect consumers and how can you do that unless you are putting information out that consumers can clearly understand?

  24. Philip Castle 21st May 2014 at 4:57 pm

    If I were asked to put it in to an order of priority it would be;

    1. Peter Herd’s concern – Ensure the FCA are carrying out their statutory objectives and perimeter Police unauthorised abuse of the advice sector.
    2. My soap box – Treat all professional advice with the same rights i.e. a longstop and not infinity (I can see an argument for a longstop based on when the client relationship finishes and not 15 years)
    3. Harry’s concern – a collegiate arrangement at APFA and at the PFS.

    Just because I bang on about the longstop issue (and Keydata) doesn’t mean I believe it is the most important issue. The longstop has more implications for sole traders (Harry) and Networks than it does for my firm which is a Directly Regulated Ltd Company. The longstop is a point of principle and the F-pack have breached a basic principle by putting advisers, outwith the rest of society.

    Just wait until car salesmen doing finance realise they’ve just been lumped in with us if they have a CCL as they’ve just lost their longstop with no consultation.

  25. Peter, are you aware of what you’re asking for?

    I doubt convicting all non-authorised individuals is part of the regulators statutory objectives. Do you realise how many 2-bit blue-collar criminals this would include?

    I would imagine that this only applies to authorised firms and individuals otherwise the remit is huge and it would take a team the size of the national forensic financial crime squad to be able to achieve this (along with special recruitment, training and equipment).

    Huge increase in regulatory fees anyone?

  26. Morning Harry

    As my granddad used to say “same meat different gravy”
    My beef is after nearly one and a half years after the changes of the RDR; we are still reading public statements that tend to be negative towards Independent regulated advice, everything from the regulator is; there are still problems, you are not getting this right, another fine hear another fine there, confusions at every corner. This is picking up pace again with the introduction of the MMR.

    Your statements I largely agree with and find it sad that by your own admission on Apfa ” I beginning to wonder why I bother” and that speaks volumes, I will add I am not a member for that very reason, they (Apfa and others) could and should be so much better, however some may argue if your not a member what right have you to criticise or lobby for change ?

  27. Matthew

    If only we were dealing with 2 bit blue-collar criminals may be that is the part of the problem perceptions of individuals who think that this level of crime doesn’t matter.

    There’s no point in setting a statutory objective of protecting consumers putting in place rules and regulations authorised advisers simply to ignore the activities of very sophisticated criminals and in some cases just individuals just out to maximise profit and exploit so-called loopholes. I forgot to say the loopholes don’t really exist is just that the FCA’s interpretation of the rulebook when they see fit.

    Why can individuals open up websites under journalistic principle for example and market themselves as experts. To me an expert is somebody who gives advice and if that is the case they should be covered by the relevant legislation after all the regulator has a statutory duty to make sure that the material that these so-called experts produce is correct, isn’t that what they are meant to be doing protecting the consumer.

    How many articles have you read about pension is not providing a good enough rate of return and invest your money in the latest harebrained idea whether that’s overseas property or teak oil. I don’t call the regulators performance on this particular area protecting consumers I would have said it closing their eyes and hoping for the best.

    The very least that the regulator should be doing is to educate the masses on the importance of getting advice from a registered an authorised financial adviser and it’s about time the Treasury select committee started are some very awkward questions of the FCA on this subject as we had one too many financial scandals which all include unauthorised individuals. The old FSA’s own track record is there to see if you request information.

    Fraud is fraud and I don’t particularly care how many jail places get filled.

  28. Wouldnt the millions wasted on advertising MAS be better directed at this type of campaign!

  29. Perhaps the FCA should rather look closer to home. I know without doubt (and have absolute proof) that the word Independent is being used by those not entitled to do so. That some of these are encouraged by their network should come as no surprise.

    Do we have RDR rules or don’t we?

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