alternative pension investments

hollylouise_2

i am considering going into a API pension i am 51 so have minimum 10 yrs before considering retirement has anybody got any pros+ cons about this let me know

Linton

What is the API, who with, how did you hear about it and why are you considering it rather than conventional investments?

I ask because this area has been a favourite hunting ground for scammers as the investments may be outside the protection of the regulators.

dunstonh

am considering going into a API pension

There is no such thing as an API pension. You have a pension that will contain your investments. Most people use conventional investments within their pension whilst some (typically high net worth who know what they are doing and dont mind high risk) may put a bit in unconventional investments.

As mentioned by Linton, virtually all the scams and issues take place in the unconventional investment world as they dont need regulated individuals/companies and therefore you get no consumer protection.

Maybe you should tell us what "alternative" investments you are looking at, what your knowledge is in that area and the amounts involved.

hollylouise_2

I have been approached to see if i can get a better return on my pension instead of being in a stakeholder type pension where companies invest for you this scheme gives you the choice to put your fund into alternative areas its sounds dangerous but is this scheme legal and despite the risk i have 10 before i i retire is it a option

Linton

hollylouise wrote: »

I have been approached to see if i can get a better return on my pension instead of being in a stakeholder type pension where companies invest for you this scheme gives you the choice to put your fund into alternative areas its sounds dangerous but is this scheme legal and despite the risk i have 10 before i i retire is it a option

Were you "approached" by an unrequested phone call. If so RUN A MILE! People have lost large amounts of money this way when the schemes turned out to be fraudulent. Regulated investment companies dont cold call.

Perhaps if you gave us more details as I requested in the first post we could comment more specifically.

jamesd

The first key thing there is "I have been approached". If a financial services firm approaches you first you should take that as a sign that you should not do business with them because such firms are normally banned from making approaches like that. So approaching you first immediately tells you that you're dealing with a firm that is not following the rules with you, even before they have your money.

If it is this firm, heed the warning: "Alternative Pension Investments Ltd is not regulated by the Financial Conduct Authority and are not able to offer financial advice in any way". No FCA regulation means none of the normal consumer protection for you, including no ability to complain to the Financial Ombudsman Service and no ability to get paid by the financial Services Compensation Scheme.

If it is that firm, they go on to write:

"Free Pensions review

Our Pension reviews are performed by regulated Independent Financial Advisors. The IFA will write to all of your existing pension fund providers, and request an accurate update on the pension fund value(s), how the funds have performed over the last five years, and what fees you have been charged, and will continue to be charged. The IFA will send us and you their report, which will ensure you have the fullest understanding of your current Pension fund position."

Note that the IFA is just providing values, not providing any advice.

"API Re-investment report

If the pension review suggests that you have any underperforming funds that you should consider re-investing, or your current investments do not look as if they will satisfy your retirement objectives, the API investment team will review your fact-find and make you aware of possible investment alternatives for you to consider. Our report will contain a short executive summary, but include detailed information and due diligence on all of our investments, so that you will have the opportunity to consider everything carefully and in detail. The report will outline the risks as well as the rewards."

And it is API, not the IFA, which selects the investments to use. Note the earlier warning about whether they are or are not allowed to give investment advice.

"API Consultant review meeting

Your consultant will then visit you to review the Re-investment report, answer any questions that you have, and explain the process that will follow, if you do decide to take control of your pension, and make some re-investment decisions.

The consultant will be able to do some what-ifs with you, and potentially agree with you a different mix of alternative investments, to the point where you feel you have the right strategy to execute."

Here they are getting it to look as if it is you, not them, who is deciding to invest, even though all of the options are coming from their suggestions.

"IFA and SIPP Trustee

The consultant will ask you to complete required authorisations for the SIPP Trustee, and to formally invite the IFA to advise on the suitability of the SIPP."

Note carefully what the IFA is handling: just the SIPP, not the investments that API suggest you use. You're not getting regulated advice on the suitability of the investments. Instead, the IFA is acting as a front to reassure the trustees of your current pension scheme that it is OK to agree to the transfer.

If this is the firm you should cease all contact with them.

If you have signed any consent forms that might give an IFA to act with your authority, also phone your current pension provider, tell them about this warning and ask them not to accept any transfer requests for the next year at least without contacting you directly first to confirm that you do want the transfer to go ahead. If you are uncertain whether you've signed anything like this, contact the existing pension firm anyway to let them know so they can put the protection in place.

Now read about Capital Alternatives and the FCA court action against them for selling investments without being regulated by the FCA. Notice the number of different names used.

itsanne

As the OP has not, I would like to thank the above posters who have given such good advice to prevent her making a disastrous mistake.

atush

hollylouise wrote: »

I have been approached to see if i can get a better return on my pension instead of being in a stakeholder type pension where companies invest for you this scheme gives you the choice to put your fund into alternative areas its sounds dangerous but is this scheme legal and despite the risk i have 10 before i i retire is it a option

you have been approached by someone who wants your money.

Those who can help you if you need help, wont approach you.

How do I know this? Because, if they are regulated and can help you, the are NOT allowed to 'approach' you.

mania112

atush wrote: »

you have been approached by someone who wants your money.

Those who can help you if you need help, wont approach you.

How do I know this? Because, if they are regulated and can help you, the are NOT allowed to 'approach' you.

Can you explain this?

The rules are hazy. As a new Adviser am I only allowed to wait for my phone to ring?

I think I read that 'packaged investments' (i think that was the term) is acceptable for cold-calling.

And what is cold-calling? Am I allowed to leaflet-drop?

cgzz

I also have a query about cold calling. For a number of years now I have been a client of a company that gives independent financial advice. The fact that the company seems to have a high turnover of IFAs is not my problem - that's the company's problem to try and retain its IFAs. However, every time I am contacted by a new IFA it is to try and transfer my pensions and ISAs to new providers. So my question is simple - if the company employs a new IFA and they phone me to advise transferring my pension is that classed as cold calling? The last contact with the company was about 18 months beforehand.

dunstonh

So my question is simple - if the company employs a new IFA and they phone me to advise transferring my pension is that classed as cold calling?

No. Your relationship is with the firm. Not the employees.