In a statement on Tuesday, the UK regulator said: “We are aware that some firms have been advising on pension transfers or switches without considering the assets in which their client’s funds will be invested.
“We are concerned that consumers receiving this advice are at risk of transferring into unsuitable investments or, worse, being scammed.”
Bait and switch
An industry source told International Adviser that the FCA had been looking into UK overseas defined benefit (DB) pension transfers via Dubai by more than one international financial advisory firm.
In one instance, a client was reportedly offered an offshore pension scheme where the funds were to be invested in a portfolio of low-cost exchange traded funds (ETFs). However, the money was ultimately invested in a Mauritius-based fund that paid high up front indemnity commission.
Pension scam warnings
The financial regulators of Jersey, Guernsey and the Isle of Man have all recently issued warnings to residents to tread carefully when transferring or investing their pensions following a rise of scams in the UK.
