The Financial Conduct Authority (FCA) has warned consumers to ignore offers for free pension reviews from unauthorised firms which are looking to take advantage of the reforms announced in the Budget.
The FCA said that it has evidence that people are being contacted unexpectedly and has warned investors to be “wary” of these offers for a free review which often encourage them to move their pension “to get better returns”.
The regulator said: “Most of the companies making these offers are not authorised by us, though they often falsely claim they are acting on our behalf. We are also hearing that some callers claim to represent the government after its announcement to introduce free retirement guidance. This initiative has not been launched yet and when it has we, and the government, will provide further information.”
The FCA advised consumers that if they are contacted out of the blue to “just hang up” as an authorised financial adviser offering advice is unlikely to be cold calling and that professional advice on pensions is not free. It also warned that these unauthorised individuals were looking to switch consumers into SIPP and SSAS schemes.
The FCA also encouraged consumers that are considering reviewing their pension arrangements to get “independent advice” from an authorised financial adviser, stating “If you are considering reviewing your pension arrangements, get independent advice from an authorised financial adviser. Your adviser should consider whether they are suitable for you. For most individual investors, investing your pension money in unregulated investments is unlikely to be in your best interests.”
The recent changes to pension rules represent great news for pension savers, with increased options and the removal of some key limits, so seek advice from the appropriate channels to see how you could benefit.