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Should I trust my financial adviser about my pension? A 4-point checklist

Should i trust my financial advisor about my pension?

The UK financial services market is as wonderful as it is complex, and fortunately features some of the best Independent Financial Advisers in the world to help those seeking good advice to ensure they are doing the best thing for their money, whether that be their pension, mortgage or savings.

But no market is perfect, and even in the UK there are a few sharks – certainly enough for EVERYONE to ask, “Should I trust my financial adviser?”.

With that in mind, we thought we should put a little checklist together.

Check they are regulated

The Financial Conduct Authority is the watch-dog for all regulated financial services in the UK, and they’re there to make sure somebody has your back.

Not only do they make the rules about what financial advisers can and can’t do, but they have the power to fine those that get it wrong or try to bend the rules, and suspend authorisation or revoke it completely if they have cause to.

Regulated financial advisers are registered with the FCA, and get their powers to advise and execute from them. You can check to see if your financial adviser is registered using their free FCA register service – you can search by firm name, individual name or even a postcode.

This will not only let you know if your adviser has ever had any trouble with the FCA, but let you know what other firms they have worked for.

If your financial adviser isn’t listed (or at least their firm), then the chances are they are NOT a regulated financial adviser. Taking advice from an unregulated adviser can be risky, not only because they may not be qualified, but they might be somebody just posing as an adviser, ready to scam you out of hard-earned cash.

For instance, the UK pensions market has suffered from major mis-selling cases in recent years (something Spencer Churchill Claims Advice are working hard to undo), and the growing role of unregulated advice in the form of marketing companies seems to be growing.

Particularly with SIPPs, marketing companies are often involved in the selling of unregulated investments. Not only are these of a high-risk nature, but if they fail the investor has no compensation available from the FSCS, or cover from the ombudsman.

Do they have a one-track mind?

No, we’re not talking about “that” kind of one-track-mind. We mean are they constantly barking on about the same pensions option? This could be a sign that they are more of a sales-agent rather than an unbiased financial adviser, genuinely trying to provide you with advice solely in your best interests.

Here, unregulated SIPP investments are a good example again. Had you even heard of a SIPP before your adviser starting spouting about it? Is there a particular investment they seem keen you place your money with? Maybe a second opinion from somebody independent might give you a better insight into what they are offering.

Advice Fees – or lack thereof!

Becoming a regulated financial adviser takes years of hard work, the passing of at least 6 exams and then constant work to keep up to date with an ever-changing market.

Does this seem like a service you could get completely for free? In some cases you can, and things are safe and all above-board, but ask yourself one question – how is this person getting paid, if not from me, then who?

This goes back to IFA’s as “sales agents” again, earning some pretty big commissions if they are able to transfer your pension into a SIPP, sometimes as much as 15% of the total value of your pension! If they are offered a free service to you, it’s perfectly reasonable to ask them how they get paid – it’s all about transparency!

By all means, if you want to hear what somebody has to say for free, and with no obligation, you can go along with it. But beware – many of these people may use high-pressure sales techniques to get you to sign up – its often best to seek independent financial advice before acting.

It’s not a solid concept, but if an IFA is charging you up-front for advice then it could be a good thing! They’re a little less likely to be taking their fee from whoever’s product they’re selling and acting in your best interests.

Have they got to know you?

At first, this might sound a little quaint, but your IFA should know you inside and out before giving advice on your pension.

A huge part of pensions advice is ensuring that you are suitable for the pension scheme they are considering you for. It sounds exhausting at first, but your adviser should look at everything, including things like your income, your current pension (and how it’s doing), your investment experience, your health, your capacity for loss, attitude to risk and how long you are from retirement.

Pension advice is all about suitability, and we can use mis-sold SIPPs as an example one last time:

For an adviser to get you into unregulated SIPP investments, they should check that:

  • You are a sophisticated investor, with knowledge of and experience in investments, capable of becoming your own pension fund manager (this is a SELF-INVESTED Personal Pension, afterall).
  • You are a High Net-Worth Individual, earning over £100,000 per year, or with £250k of investable assets. Somebody with this much money coming in would be more likely to survive if they lost their pension through an unregulated investment.
  • You have a positive attitude to risk, and understand the risk of these investments – that’s only fair, you should know what you’re getting yourself in to and they should make sure you are comfortable with it.

If your adviser is throwing advice at you while you’re still shaking his hand at hello, then how are they supposed to know that the advice is in your best interests?

What if those checklist items don’t describe me?

This checklist is of course general, and probably incomplete. There could be other reasons to mis-trust your adviser, or even trust them more in spite of these checkpoints!

But more importantly, you might be reading this list a little too late, and have already been scammed or mis-sold.

If that’s the case, you can have two things from us: First, our condolences – it’s not a fun position to be in!

Secondly (and more importantly), you can have our help. We deal with cases of mis-selling every day and if you took unsuitable advice from a regulated financial adviser then we’re the ones to get it sorted, fighting your corner with knowledge, skill and a winning strategy to get you the compensation you deserve for a happy retirement.

We work on a no upfront costs basis too, and talk is free, just call 01204 205061 or visit our mis-sold pensions website to arrange a callback!

Otherwise, keep your eyes peeled, your wits about you, and as with almost everything in life, if it sounds too good to be true, it probably is!

Happy Saving!

Please note: you have an initial cooling off period of 14 days, if you cancel outside of this period you may be charged for the work carried out and if we have already submitted your claim, which results in an offer of compensation subsequently being made, we will charge our full fee as per our T&Cs – our fee is 20% + VAT – a total of 24%. 


Alex Waters
10 August 2016
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When you get let down by someone you thought you could trust, it can leave its mark on you, emotionally and physically.


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We have decades of experience in helping people claim back money that is rightfully theirs. Whether you want to make a mis-sold pension claim, have questions about a mis-sold investment, or you’re just looking for some advice you can trust – we’ve got you covered. Reach out to our team today for a no-obligation, completely free chat. 

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