IFAs Investigated for Pension Mis-selling

bigfreddiel

I know people don't like me criticising IFAs and other finance professionals, but this needs highlighting.

Also let's get it out the way that you shouldn't believe everything you read in the press. Anyway besides that here's an interesting mis-selling case.

Investors have been have seen the value of their SIPPs fall from tens of thousands of pounds to little more than zero after being advised to move their money into highly speculative Harlequin property investments. In each case they were encouraged by unscrupulous IFAs to transfer their pensions into extremely high risk investments. Victims were cold called and promised that returns would beat their existing investments.

Victims that lost all their pension funds are now seeking compensation from IFAs who should have made customers aware of the very high risks associated with unregulated investments.

One victim has received £50,000 compensation from the FSC when she lost all of her £75,000 final salary pension.

This was reported by the law firm Hugh James.

Moral of this story. Don't trust everything an IFA tells you. Take your time and check the advice. Do your own research.

But never forget, it's only advice, it has no guarantee, you don't need to take the advice,

Final point to remember is that IFAs all think we are totally ignorant and don't understand the advice so ask as many questions as you like till you DO understand.

At the end of the day it;s probably your own fault if it all goes pear shaped.

Cheers fj

sparsely

Sounds like those IFAs didn't really deserve the "I" in their job description. Really scummy stuff, just treating their clients as moneybags to be squeezed.

dunstonh

I know people don't like me criticising IFAs and other finance professionals, but this needs highlighting.

There is no problem pointing out issues where they exist. You just have a habit of going over the top and it often comes across as an agenda.

Investors have been have seen the value of their SIPPs fall from tens of thousands of pounds to little more than zero after being advised to move their money into highly speculative Harlequin property investments. In each case they were encouraged by unscrupulous IFAs to transfer their pensions into extremely high risk investments. Victims were cold called and promised that returns would beat their existing investments.

Dodgy as hell. Shouldnt have been allowed. No retrospective opinion needed there. It was dodgy when it was done.

Thankfully, the consumers should have protection that will see much of the money returned to them. Unfortunately, it will be myself and others like me that will foot the bill. It is frustrating that good continue to pay for the bad and the regulator is slow to action on the bad whilst it micromanages the insignificant.

But never forget, it's only advice, it has no guarantee, you don't need to take the advice,

Advice does have a guarantee.

Final point to remember is that IFAs all think we are totally ignorant and don't understand the advice so ask as many questions as you like till you DO understand.

And this is where your agenda comes in to play. Making silly remarks like that.

At the end of the day it;s probably your own fault if it all goes pear shaped.

Part of it is. Yes the adviser was totally wrong but when you are told to go for unconventional offshore investments and you agree to that, then you do have to have a small element of responsibility. You are letting your greed get the better of you and going non-mainstream is rarely a good move.

bigfreddiel

I never knew advice had a guarantee, so if your advice loses me my pension pot you'll pay me back my losses. Or is that too simplistic?

No doubt I would have to prove the advice was unsuitable, which would be virtually impossible without the backup of another expensive advisor.

Nice to know we do have some comeback, so come on all you IFAs out there how often have you given bad advice and compensated your customer?

Cheers fj

zagfles

dunstonh wrote: »

There is no problem pointing out issues where they exist. You just have a habit of going over the top and it often comes across as an agenda.

He's not the only one

Dodgy as hell. Shouldnt have been allowed. No retrospective opinion needed there. It was dodgy when it was done.

Thankfully, the consumers should have protection that will see much of the money returned to them. Unfortunately, it will be myself and others like me that will foot the bill.

Or rather I imagine it will be your clients who will ultimately foot the bill...

It is frustrating that good continue to pay for the bad and the regulator is slow to action on the bad whilst it micromanages the insignificant.

Indeed - same with any other highly regulated industry. You may get the protection, but it will cost you (through fees which obviously need to take compliance/regulation costs, indemnity insurance etc into account).

sparsely

Seems a bit of a lose-lose: either you get a bad IFA whose advice is worse than useless, or you get a good one and are still paying for the bad ones through the regulatory levies.

dunstonh

I never knew advice had a guarantee, so if your advice loses me my pension pot you'll pay me back my losses. Or is that too simplistic?

If the advice was deemed unsuitable then you would have your pension pot returned. Subject to regulatory limits.

No doubt I would have to prove the advice was unsuitable, which would be virtually impossible without the backup of another expensive advisor.

The complaints process is free of charge to use. if you disagree with the outcome then you can refer your case free of charge to the FOS. If the adviser is no longer trading, then you have access to the FSCS. They asses whether it suitable.

Nice to know we do have some comeback, so come on all you IFAs out there how often have you given bad advice and compensated your customer?

Never had any advice classed as unsuitable. Most advisers have never had a case referred to the FOS. Advisers handle millions of transactions a year. Complaint stats from the FOS show just 2875 complaints were made against IFAs in 2014/15 out of a total 329,509 complaints.

mania112

bigfreddiel wrote: »

Final point to remember is that IFAs all think we are totally ignorant and don't understand the advice

It was going so well....then you ruined your own stance with a clearly stupid comment.

Anyway, I am very, VERY familiar with this Harlequin scheme.

I'm not saying this was the case from all IFA's but I suspect that most IFA's told the clients not to transfer their SIPPs to this investment >> the advice was given to the Harlequin salesmen >> and the clients ended up 'insisting' against advice to transfer >> the IFA proceeded to transfer because they felt they were not liable and if they didn't transfer, someone else would, and they wanted the fee.

I'm not saying if this was the case it made it acceptable action of the IFA, but to correct the OP, I would be fairly sure that the IFA's advice was NOT to transfer.

LHW99

Also being cold-called on any finacial product should have screamed out SCAM, no matter whether the caller actually was an IFA or not.

HappyHarry

Victims that lost all their pension funds are now seeking compensation from IFAs who should have made customers aware of the very high risks associated with unregulated investments.

And those advisers deserve everything they get. Unfortunately, poor and unscrupulous advisers exist, and bring the rest of the profession into disrepute.

There have been regulatory changes in recent years that have improved matters, such as higher qualification levels and commission bans, and this has helped, but has not cleared the entire problem.

Much as I disagree with the IFA bashers most of the time, our industry just has to deal with those that do so much damage to our overall reputation. Once again, we see a handful of scumbags bring more attention to the industry than the thousands of highly ethical and diligent advisers who provide high quality, suitable advice to their clients.

Rant over

TH1878

bigfreddiel wrote: »

Nice to know we do have some comeback, so come on all you IFAs out there how often have you given bad advice and compensated your customer?

Cheers fj

In the 8 years I've been advising, I've never had a complaint. Perhaps because I educate my clients and manage expectations.... Oh but IFAs don't do that, do they....?