In response to a question raised by MP, John Glen, the Economic Secretary to the Treasury has confirmed that the Financial Conduct Authority (FCA) is currently investigating as much as 30 unnamed individuals and firms in respect of poor pension advice and pension scams.
Mr Glen also confirmed that in the last five years, the FCA have taken action against a total of 15 firms or individuals for what it refers to as “pension misconduct.” MPs have called for the FCA to be far more aggressive and for criminal charges to be brought against rogue advisers.
An example of such “pension misconduct” would be recommendations to transfer valuable benefits out of a defined benefit final salary. These benefits would be guaranteed, so, if transferred somewhere else, they would be immediately lost. The FCA have determined in previous checks that nearly half of the advice given could be classified as unsuitable.
To be perfectly clear, advice on final salary pension schemes can only be given by IFAs holding an appropriate qualification. Mortgage advisers or IFAs not holding these qualifications are expressly acting out with their permissions and may even be liable to criminal prosecution. Pension holders should be extremely vigilant in the event that advice is apparently passed to a third party for sign-off.
The Financial Services Act 1986 came into force as of 29 April 1988. Although the passage of time can make claiming more difficult, it is a fact that there is no “sunset clause” on defined benefit final salary scheme pensions; meaning that, in theory, the relevant paperwork has to be retained ad infinitum. Being persuaded to leave, for example, the Mineworkers Pension Scheme when the advice was clearly not appropriate could see highly significant compensation payable, depending on the length of service.
If you feel you may have been given poor advice to transfer away from an occupational pension scheme and are concerned that you might have lost money, Beat the Banks are here to help with our free pension transfer check.
To find out more call 01382 200474