Steel workers suffer from ‘just plain crooked’ pensions advice

capital0ne

Anyone thinking of speaking to an FA had better beware, the FCA’s own studies indicate that less than half of the advice given by financial advisers on transferring from defined benefit pension schemes is suitable.

British Steel workers are suffering from bad financial advice which can encourage them to quit their valuable final salary pension schemes in favour of worse arrangements, MPs have warned.

Advice is too often “shoddy or just plain crooked”, Frank Field, chairman of the influential Commons work and pensions select committee, said in a letter to the Financial Conduct Authority’s (FCA) top supervisor Megan Butler.

“It is apparent that insufficient protections are in place to prevent consumers with defined benefit pension pots being !seduced into a transfer against their !interests,” he said.

The FCA acknowledges that final salary scheme members will rarely benefit from transferring out of their pension, but professional services firm Mercer estimates 210,000 people did just that with £50bn of savings between April 2015 and June 2017.

Rogue advisers are specifically targeting the more than 100,000 members of the British Steel pension scheme.

Its a rough old world out there so beware of crooks and fraudsters in smart suits rolling up on your doorstep!

Merry Christmas :beer:

dunstonh

Anyone thinking of speaking to an FA had better beware, the FCA’s own studies indicate that less than half of the advice given by financial advisers on transferring from defined benefit pension schemes is suitable.

That was not what the FCA found.

They found that 47% of files met standard. However, 36% were inconclusive. 24% were found not suitable based on information on file. Most of the inconclusive were converted to suitable as were a number of the not suitable.

I know someone who had a S166 review and had something like 130 cases checked and initially around 47 were initially deemed unsuitable and all but 3 were later changed to suitable. Only 1 resulted in redress and that was due to a corrupted PDF. In most cases, the unsuitables were the person checking misreading a document or a further document needing to be obtained from the provider to verify it in writing.

That said, there are some pop up companies out there who are targetting DB transfers relatively cheaply and doing half the job required. Those should be avoided.

reeac

[QUOTE=capital0ne

Its a rough old world out there so beware of crooks and fraudsters in smart suits rolling up on your doorstep!

Merry Christmas :beer:[/QUOTE]

Absolutely, what with equity release, taking out cash from your pension pot and those clay filled electric heaters it's caveat emptor 24/7.

capital0ne

dunstonh wrote: »

That was not what the FCA found.

They found that 47% of files met standard. However, 36% were inconclusive. 24% were found not suitable based on information on file.
That said, there are some pop up companies out there who are targetting DB transfers relatively cheaply and doing half the job required. Those should be avoided.

Cheers Dunsty I knew you would agree its a dodgy old business - only trust a genuine IFA who knows what hes talling about.
Get clear evidence the IFA is qualified.
Interview clients if possible
Check his credentials with the FCA if possible or whatever their controlling body is.
Meet face to face.
See his accounts.
See at least three IFAs
If possible arrange a joint meeting and get each one to present their case and discuss openly.
I doubt any of this is possible but you'll be paying a huge percentage and its good to get it right.
You wouldn't buy a car without a test drive and maybe a check by a qualified engineer or organisation.
Or you could DIY but only to a point where you'll be locked out of dealing because it's a closed shop.

ex-pat_scot

capital0ne wrote: »

Cheers Dunsty I knew you would agree its a dodgy old business - only trust a genuine IFA who knows what hes talling about.
Get clear evidence the IFA is qualified.
Interview clients if possible
Check his credentials with the FCA if possible or whatever their controlling body is.
Meet face to face.
See his accounts.
See at least three IFAs
If possible arrange a joint meeting and get each one to present their case and discuss openly.
I doubt any of this is possible but you'll be paying a huge percentage and its good to get it right.
You wouldn't buy a car without a test drive and maybe a check by a qualified engineer or organisation.
Or you could DIY but only to a point where you'll be locked out of dealing because it's a closed shop.

There are dodgy individuals, regardless of industry or specialism. Wherever there is complexity, there is the opportunity for the unscrupulous. They adapt far faster than rules can keep up.


I agree with most of your sentiments, apart from the last.
There are products you cannot access as a retail investor, but frankly there are good reasons that you have to be a professional to access some exotic stuff. At that stage, if you truly understand the features and risks, then you are waaay beyond the limits of this forum.
Frankly, VWRL or VHYL (or other provider's global diversified tracker) is all you should need.