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IFA raises alarm over esoteric investments for small pension pots

An IFA has raised concerns about people being advised to move their small pension pots into esoteric, illiquid investments.

Clearwater Financial Planning was recently approached for a second opinion by a prospective client who was considering transferring his £33,000 pension, held with Axa. The client was planning to invest through a Berkeley Burke Sipp in a “storage pod” offered by a company called Group First, which offers property investment portfolios.

After speaking to Clearwater he has since decided not to switch.

The client was initially contacted about the investment by unauthorised firm Jackson Francis. Managing director Stuart Chapman says: “We do all we can to make our clients understand we are not advisers. Our clients have chosen to explore alternative solutions to building wealth.”

A Group First spokeswoman says it does not consider the investment to be “esoteric” as it is onshore. She added it is company policy that every investor must receive advice from an IFA.

The client received a suitability report from Scottish-based firm Moneywise Financial Advisors, after which the client responded saying he was comfortable with the risk.

Clearwater Financial Planning managing director Duncan Carter says: “When the Financial Service Compensation Scheme bills come through and advisers face increasing costs, I am surprised more people do not want to speak out where they see instances where a client has made an investment which does not match their risk tolerance.”

Berkeley Burke declined to comment.



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