Strange Cold Call re fees

MyOnlyPost

I was hoping someone may have some advice / experience that can help me out.

I just received a cold call regarding my pension and in particular the fees. I was offered a free consultation where they would check out the fees I am currently paying and if appropriate make a claim to my provider to get these fees reduced.

The gist of the conversation was regarding a government act in 2006 which I know nothing about which goes along the lines that fees for long standing pensions must be brought into line with the current level of fees if the customer requests it. This apparently because fees were much higher in the early 90's due to the booming market, so it is possible that these fees could be out stripping the growth of the fund.

Anyway, I'm not one for taking cold calls normally but this is something that has entirely passed me by (unlike the PPI or bank charges etc). Does anyone know if there is any truth in this? Also I asked whether fees could be reclaimed back to 2006 and was told no. I asked how then they make their money if there are no fees to reclaim and was told they charge it to the provider.

It all sounds a little dodgy to me and if it's true surely I could just sort this out myself with my pension provider. Is there anything to be gained by using an intermediary?

Thank you in advance for any replies

Aegis

MyOnlyPost wrote: »

I was hoping someone may have some advice / experience that can help me out.

I just received a cold call regarding my pension and in particular the fees. I was offered a free consultation where they would check out the fees I am currently paying and if appropriate make a claim to my provider to get these fees reduced.

The gist of the conversation was regarding a government act in 2006 which I know nothing about which goes along the lines that fees for long standing pensions must be brought into line with the current level of fees if the customer requests it. This apparently because fees were much higher in the early 90's due to the booming market, so it is possible that these fees could be out stripping the growth of the fund.

Anyway, I'm not one for taking cold calls normally but this is something that has entirely passed me by (unlike the PPI or bank charges etc). Does anyone know if there is any truth in this? Also I asked whether fees could be reclaimed back to 2006 and was told no. I asked how then they make their money if there are no fees to reclaim and was told they charge it to the provider.

It all sounds a little dodgy to me and if it's true surely I could just sort this out myself with my pension provider. Is there anything to be gained by using an intermediary?

Thank you in advance for any replies

Basically they're trying to get some commission out of you, by the sound of it.

If you're interested in reviewing your pensions, I'd suggest you either check it out yourself using various discount brokers or do a search for a local IFA via unbiased.co.uk, a suggestion that's largely down to my complete mistrust of cold callers.

I'm not sure what they're referring to when they talk about providers being forced to lower their fees if asked by the customer. I must admit that pension legislation isn't my area of expertise, but I'm pretty sure that I'd have heard about such a useful piece of information from one of my colleagues by now.

dunstonh

I just received a cold call regarding my pension and in particular the fees. I was offered a free consultation where they would check out the fees I am currently paying and if appropriate make a claim to my provider to get these fees reduced.

Cold calling on investments is largely frowned upon an in some cases banned.

The gist of the conversation was regarding a government act in 2006 which I know nothing about which goes along the lines that fees for long standing pensions must be brought into line with the current level of fees if the customer requests it.

No such legislation exists.

This apparently because fees were much higher in the early 90's due to the booming market, so it is possible that these fees could be out stripping the growth of the fund.

In some cases that is correct. Many modern plans do offer lower charges. However, not all do. Also, charges are not the be all and end all. It is perfectly acceptable or even desirable to avoid the cheapest option going.

The only rule that exists on charges was introduced in 2001 and is known as RU64. Any pension set up after that date (or the lead up to it once the incoming rule was known) has to see the adviser benchmark the charges of the recommended plan against a stakeholder pension. If it is more expensive, then the adviser has to have justification for recommending a more expensive pension (typically quality of fund or product offering would apply there). That rule does not apply to non-advised cases.

Does anyone know if there is any truth in this?

No. It sounds like you have been misled.

Also I asked whether fees could be reclaimed back to 2006 and was told no. I asked how then they make their money if there are no fees to reclaim and was told they charge it to the provider.

That is another lie.

Almost certainly what they will do is tell you to transfer the pension and will then take a commission of up to 8% of the fund value from your pension. That is how they make their money.

It all sounds a little dodgy to me and if it's true surely I could just sort this out myself with my pension provider. Is there anything to be gained by using an intermediary?

It is very dodgy based on how you have explained it. A number of rule breaches appear to have taken place there and probably a few others. e.g. you are not allowed to use lies (obviously) or use a sales method that is not direct in what you are doing to obtain business. They probably also didnt state their FSA regulated status (independent, tied or multi-tied - tied and multi-tied have to state who they represent). They may not even be FSA regulated. Some of the scams in financial services use cold callers who are not regulated and dont comply with FSA regulations. They then obtain the information and then use a genuine firm to place the business through. They genuine firm may or may not be aware of the techniques being used. Some really bad ones dont even use authorised pension schemes and the money is farmed off into some overseas schemes to never be seen again.

There is nothing wrong with getting the pension reviewed. Get a local IFA who YOU approach to look at it and not some cold calling scamming/liar who is looking to make a quick commission on the back of false information.

MyOnlyPost

dunstonh

Thank you so much for your detailed reply

jamesd

It's worth saying where your pension currently is and what the charges, including fund charges, are. It may well be that there's a better deal available for you now if the pension has been going for quite a while.