No Win No Fee Pension Claims

The Financial Ombudsman Service reports a massive spike on pension mis-selling claims. The overall negative perspective on employer’s schemes has disillusioned many employees.

Unfortunately, this led to quick enticement towards self-invested personal pensions (SIPPs). While helpful, SIPPs only work if they’re Financial Conduct Authority (FCA)-regulated. In addition, its investment vehicles must have low risks.

If you’re contemplating on having an SIPP, make sure you’re not walking right into a trap. Here are four warning signs you’re about to get mis-sold pensions.

Benefits-Centered Conversation

Employees often turn to financial advisers regarding pensions advice. Unfortunately, if your adviser works on a commission basis, they are likely to forward SIPP’s positives. While it is a common sales practice, disregarding the customer’s success just to make a sale is not.

Financial advisers gain commissions from every SIPP fund signup they generate. Therefore, observe whether the adviser is highlighting only the benefits all the time. Remain cautious when they consistently highlight the high but speculative returns.

High-Risk Investment Vehicle Performance Speculation

Any investment fund uses speculation. However, regulated funds use experienced fund managers, actuaries, and other individuals with tools and platforms for investment analytics.

This allows them to find and link the fund to secure investment vehicles. Unfortunately, most SIPP funds promising extremely high returns rely on speculative investments in holiday home and airport parking developments.

In this light, it pays to do market research on the prospective investment scheme’s target industries. If they’re set for long-term growth, then your pensions are likely to yield the promised results.

Upping an SIPP’s Pros Despite Eligibility for Employer’s Pension Scheme

SIPPs are useful when pensioners need a transition fund when moving from one job to another. An employer’s pension scheme offers defined contribution or benefits to their pensions. This makes them better than high-risk SIPPs.

Unfortunately, financial advisers will continue pushing for SIPPs. If they’re urging you vigorously, then they will likely mis-sell pensions on you. As a rule of thumb, employer’s pension schemes are better than SIPPs because of their security.

Unregulated Collective Investment Scheme

The FCA is responsible for monitoring all banking and investment activity in the UK. Therefore, any unregulated collective investment scheme (UCIS) is not within their jurisdiction.

They issue warnings against joining these funds. If you do join one, you have no legal backing should the fund yield low to no results during its maturity rate.

In this light, only join regulated schemes to prevent problems with your SIPP.

In case you need help with your mis-sold pensions, you can always approach third-party advisers to help you reclaim what is due to you.