Pension Awareness Week – How to spot a mis-sold pension

Pension Awareness Week – How to spot a mis-sold pension

One of the main things to look out for to determine if you were mis-sold a pension is that it is not about the money you have lost – it is about the circumstances in which you were advised to invest.

Independent Financial Advisors and SIPP providers have a duty of care to make sure that you know exactly what product you have chosen, including the details of risks and circumstances. If you were not provided with the correct advice, you were not clearly explained the risks or were not provided with sufficient information, then you may have been mis-sold because you could have ended up with a product that you did not intend to commit to from the start.

During a pension transfer, consumers are supposed to be presented with extensive information relating to a transfer including a full analysis of the benefits and risks of a transfer. An adviser ought to make enquiries regarding the consumers’ attitude to risk and the suitability of the product. These are requirements under the FCA Handbook, but were regularly overlooked by both regulated and unregulated advisers.

How do I know if I’ve been mis-sold a pension?

You may have been mis-sold your pension if:

• The Terms and Conditions were not explained to you in detail
• The charges and fees were not properly explained to you, including the full cost for management fees and additional costs
• You were not explained the risks involved in transferring a pension or any underlying investments
• You were recommended a pension that involved high risks that were unsuitable for your needs and objectives
• You were contacted by a third party
• You were guaranteed significantly high returns on investment, which seem ‘too good to be true’
• You were pressured into acting quickly
• You were informed that you could take out a large sum of cash before your retirement age

How is this different to a pension scam?

Pension scammers will typically try to persuade you to cash your pension in. This can be done via a lump sum or a whole amount. They will then try to get you to hand the money to them to invest.

How can high risk investments and pension mis-selling be linked?

Often, advisors may recommend you transfer your pension into a Self-Invested Personal Pension (SIPP) in order to facilitate an investment into unsuitable and/or high risk investments.

The high risk investment may fail or decrease significantly in value which ultimately has an overall effect on your pension.

The Financial Conduct Authority regulates the sale of mainstream investments, such as stocks, shares, and funds that you may normally choose to invest in via a SIPP. However, there are a host of unregulated investments that investors have been advised into investing their funds.

Some commonly known examples of high-risk investments are:

• Store Pods
• Global Forestry / Ethical Forestry
• Overseas Property Developments
• Parking investments
• Elysian Fuels

If you are unsure about a SIPP product or a company, do your research and be absolutely sure that the product and the advice is right for you. Remember that you are looking at investing your savings for your future.

If you think you may have been mis-sold a pension, contact Oakwood Solicitors today to provide us with some information about your pension transfer, and we may be able to advise you if you have a viable claim.