According to a report by FCA in 2018, only 48.1% of individuals received sound pension advice. Such issues have resulted in a continually rising number of mis-sold pensions. Unfortunately, most individuals do not get to know that they are a victim until it’s already too late.
Thousands of individuals end up transferring their hard-earned money to the wrong investments. Mis-sold pensions have, in most cases, resulted in either total or partial loss of pension funds.
To avoid such mishaps, it would be best if you took your time to understand the signs that you have been mis-sold a pension. Read on for insightful signs to look out for.
Inexperienced Advisor
The first sign that you have been Mis-sold is if your advisor is not as experienced as they claimed to be. You should be worried if your advisor does not have educational qualifications and has not handled such cases before. Your advisor should at least have a degree in business management, economic or finance law. The professional should also prove that they have undergone a trainee program and passed it as per the company’s regulations. Most importantly, look out for minimum requirements issued by the Pensions
Management Institution
If you have already taken any pension advice and later realize that the advisor is not as qualified as they made you believe, you are eligible for a Mis-sold pension claim.
Information about Pension Fee Was Withheld
If you realize that some fees or charges were incurred and you had not been made aware of it before, that could be a bad sign. This is because the withheld fees could result in an overpayment, whereby you end up paying more funds than your pension. Therefore, it is best to try and get to the bottom of the issue or file a compensation claim.
Cold Calling
The other common red flag to watch out for is if you received your pension scheme via cold calling. This is a situation where an advisor calls you out of the blues and offers you an irresistible offer, claiming that it will help you increase your pension funds. These calls are mostly from unknown numbers, and if you are not careful enough, you might end falling for their trap.
The most efficient way to avoid falling victim is to ask the caller more questions about your personal finances. If you realize that they know nothing about the situation, it is time to run for safety. Such calls always turn out to be scams.
The Investor Failed to Offer More Information About Your Pension
Research has shown that many of the total Mis-sold pension cases result from failure to get clear pension information from investors. For instance, if an investor is unwilling or cannot offer clear information on a specific issue, that should raise a red flag. Most people are only told the positive things about their pension as a way to blind them. The investor leaves out some risks involved in the pension scheme to convince you to join without second thoughts. This pushes you to invest your hard-earned funds without complete knowledge of what is involved.
If left out, even the tiniest details make a huge impact. You should be super cautious, especially if you are a SIPP investor. In case of anything, you should complain about the pension scheme.
No Paperwork Involved
Pension is a considerable investment. You cannot risk taking any business without appropriate paperwork.
A legit investment should have clear paperwork with details on what is involved and what to expect. It should also indicate how long you should expect the investment to take and include the potential risks involved.
Having paperwork helps you establish if you are willing to invest in the scheme or look for other alternatives. If an investor comes to you without paperwork, it is time to look the other way.
You Are Being Pressurized to Invest
In some cases, the investor may be pressuring you to invest. This only happens if they are getting something extra from your investment, and you should therefore think twice. A good investor will give you enough time to consider if you want to invest before signing the papers. If you feel that they are putting you under too much pressure to make a hasty investment decision, that could be a sign of Mis-sold pension.
Moreover, if the deal sounds too good to be true, then think twice. Remember that every investment comes with some risks. If what you are offered comes with no risk, the chances are that it is a scam.
Take Away
The first step to avoiding pension mishaps is taking your time to understand what mis-sold pension is. You should then check out the common red flags that you are being scammed and take the necessary step to spot any of the highlighted signs.
