How to avoid the pension fraudsters

If you’ve got a pension pot, I’ve got some bad news for you; there’s a good chance you will be targeted by pension fraudsters in the not too distant future.

Here’s the good news – it’s not all that difficult to avoid the pension fraudsters. Read on to find out how.

I’m prompted to write this post based on new research from pension provider MetLife.

They have found that 9% of individuals surveyed have been targeted by pension fraudsters since they retired.

These approaches from pension fraudsters covered a variety of scams; everything from trying to convince retirees to share their bank details to attempting to flog them dodgy investments.

Here in the South East, the percentage of those targeted by pension fraudsters was slightly higher than the national average, at 10%.

So how can you avoid the pension fraudsters?

Always seek advice from an Independent Financial Adviser who is authorised and regulated by the Financial Conduct Authority.

Don’t just take his or her word about this authorisation; check the Financial Services Register, ask to see a copy of their Statement of Professional Standing and visit their offices if possible. Protect yourself.

It’s preferable to work with a well qualified Financial Planner; look for the Chartered Financial Planner or Certified Financial Planner (CFP) qualifications.

Whilst these qualifications are no guarantee of excellent advice, they do at least prove the adviser has demonstrated their commitment to higher standards than the minimum required.

Always take steps to fully understand any recommendations being made. If you don’t understand what is being recommended, ask more questions.

If your adviser is unable or unwilling to answer those questions to your satisfaction, walk away.

Avoid exotic investments

Never get involved in anything exotic or esoteric. The best investments are simple. As soon as your adviser starts talking about alternative asset classes, investment ‘opportunities’ or products which offer high returns with low risk, walk away.

The most important thing to remember is to apply common-sense to your financial decisions.

Never rush your decisions. If someone is placing you under a time pressure to make a decision, walk away.

More fraudsters coming soon

I believe that, from April when new pension freedom rules are introduced, we are going to witness a big surge in pension fraudsters, attempting to convince people to withdraw money from the relative security of their pension pots and either steal the cash or direct it into dodgy investments.

If in any doubt at all, please seek a second opinion from a Financial Planner.

You can avoid the pension fraudsters, or at least make their lives very difficult so they move on to a softer target.