Authentic Company

There is a company with that trading name on the FCA register. They only became authorised a few months ago. However, the FCA register confirms they hold NO PERMISSIONS to give financial advice or be involved in the sale of pensions or any other regulated investment product.

They are authorised only as introducers. They are not an "authentic advice company". They are an appointed rep of a company called Consumer Wealth Ltd (set up in 2015). that company is authorised to give advice.

My initial view is that this set up gives me concerns. I could be adding 2+2 and getting 5 but there are similarities with models that have failed or scammed people. I will explain these bad models as follows:

Most scams/dodgy dealing use a two company structure. The cold calling company is the introducer. They do not have the same regulatory requirements and will typically say a range of things that a regulated advice company cannot say. They effectively sell the outcome and then only use the regulated advice company they are tied to in order to put the contracts in place. It also creates confusion in the event of complaint. I have had dealings with the FOS in a few of these types of setups where the introducing company denies responsibility and the advice company denies responsibility with each blaming the other. This can lead to complaints going nowhere or the introducing company being closed down when the liabilties for bad advice start coming in. Setting up a "disposable" limited company to carry liability is an issue in the industry.

So, this leads to the first question; why would a regulated advice company require an introducer company to pass leads internally? The advice company could already do that within their own permissions.

The FCA has for some time had concerns about this model and has taken some action (although mostly slow and not proactive). However, in just the last week, the Government has banned cold calling by phone (although not internet, email or post). This means that introducers will largely be out of business. They will have to rely on internet marketing until that is banned.

Moving on, pension advice is regulated. So, if a company that holds no advice permissions is giving "free pension reviews" then they are acting outside of UK law. To understand that, it means that the person at the introducing company providing that review is not authorised to do so. Does not have the required qualifications. Will not work to the same regulatory levels and rules and will be able to get away doing things or saying things that a regulated adviser cannot.

So, that comes back to the question, why would a regulated advice company need a second unregulated (to give advice) company to provide that review?

I don't know about this company but there are concerns I would want answering. Also, looking at the pension safe website, leads to further questions.

1 - Pensionsafe website says: At Pension Safe we use the UK's leading Independent Financial Advisers who are all regulated by the Financial Conduct Authority... - Really? Pension safe refer to Consumer Wealth Ltd. Consumer Wealth was only incorporated in Dec 2014 and authorised in Jan 2015. The director, Omar Hussain, has held no regulatory control functions prior to March 2015 as an IFA. He did spend just over a year as a sales rep at Lloyds Bank between 2011 and 2012 They are not the UK's leading IFAs. I can't tell you who is but it won't be a new company with such a short history.

2 - Are they actually IFAs? The Consumer Wealth website makes no reference to being IFAs. IFAs normally make a point of highlighting their independence as it is important. It is a key selling point about their process. So, why no mention of being an IFA on their website?

3 - This is a harsh one but the Consumer Wealth website says: "Consumer Wealth is authorised and regulated by the FCA and our team includes a senior compliance expert who ensures everything we do is in line with rigorous UK government regulations.". - The FCA website shows the same Omar Hussein is the compliance officer. It is normal for a director to hold the compliance control function but would you refer to yourself as a senior compliance expert with that track record? (never having held compliance control functions prior to 2015)

4 - I am a compliance officer. I am not a senior compliance expert and recognise that. So, we buy in external compliance support and use one of the UK's major compliance companies. They have issued warnings that IFAs should not use introducing companies that do free pension reviews that pass on leads to them as they are a high compliance risk and the advising firm could end up suffering the liability. There have been some recent cases where the FOS has ruled against the advising company where introducers did all the leg work.

As I said, I could be doing 2+2=5 and there are possibilities that could be genuine. However, one thing you cannot get away from and all the regulatory bodies and consumer groups say this. Do not engage with companies that offer free pension reviews. Genuine companies do not do free pension reviews. Most of these lead to scams or dodgy activity.