Internet finance sites make claims.
In regulated territories claims have to be substantiated and words have to be chosen carefully, whereas offshore the same powerful words are often utilised without any concern for accuracy. Take the claim of pension qualifications or being “experts” in their field. Take the claim that they hold sufficient regulation to advise and sign off on transfers.
In a shocking revelation, the Guardian newspaper published a report by one of the largest pension companies in the UK that an analysis of pension transfer requests to QROPS showed that around 80% of the applications had falsified IFA information on them, and claimed “qualified advisers” were nothing of the sort. In the UK, only around 15% of advisers have a pension specialist qualification, and yet most overseas websites claim that their “advisers” are all qualified.
Do they have pension qualifications at all? Well, I viewed a snapshot of websites that came up when I looked for advice on QROPS. Surely if they did have their claimed specialisation then they would all be advising both offshore and in the UK where there is a severe shortage of qualified IFAs with the necessary pension qualifications to advise on a pension transfer; less than 20% remember.
Indeed such is the demand for IFAs with pension qualifications that salaries for this specialism have shot up- it is not an easy exam to pass and has one of the highest failure rates of the Advanced Diploma papers.
I recently saw a distressing email from someone whose life had been ruined by someone he believed had proper pension qualifications, and who had made claims of specialisation. His retirement plans are destroyed, he is too ill to work and his marriage is on the rocks. Because he believed the salesmen’s line about pension qualifications, he believed other information he was told.
Upon reading this email, a level six adviser ( Chartered/Certified level ) immediately emailed me to register his disgust at how this could happen. Although highly qualified himself, he is taking further exams to get his pension qualifications .
To directly quote what he said-
“ The “provision of financial / investment advice” (call it what you will), should be put on a similar level to the provision of medical advice.
And that means Chartered or Certified – certainly in terms of qualifications – and experience too.
It’s not just about technical knowledge and qualifications : you have to be able to communicate with people.
One’s own health and well-being, physical or mental, has to come first : without that you are lost and so is everything else for you.
Financial health is important too.
But, would you go to a doctor, expecting him or her to have passed a couple of multiple-choice exams (ie. FPC*) over the last six months in elementary medicine? And then be diagnosing you for cancer ?
It’s madness, sheer total madness!
I’ve always regarded the financial services profession as being on a similar level to the medical profession.”
Remember, you only have one working lifetime to build up a fund for retirement that someone without pension qualifications can lose for you in the blink of an eye- leaving you no time to build up another fund.
Take the adviser’s points above seriously, ask for evidence of pension qualifications- in writing- that can be verified. The pension qualifications you need to ask about are-
G60/ AF3 ( Chartered Insurance Institute )
Pensions Paper ( IFP )
APMI ( Pensions Management Institute )
Actuary
Only if the adviser has these pension qualifications can you be sure your adviser understands UK pensions at a high enough level to be able to provide advice at the required level.
Remember: The starting point for any transfer to an overseas pension must be the UK pension. If the person offshore that advises you about a transfer is not qualified to UK standards on a complex UK product, then you are putting your financial health (or worse) at serious risk.
* An out of date basic exam that no longer meets minimum qualification levels in the UK- also touted by offshore advisers as being “Fully Qualified”. These are not pension qualifications
The views expressed in this article are not to be construed as personal advice. You should contact a qualified and ideally regulated adviser in order to obtain up to date personal advice with regard to your own personal circumstances. If you do not then you are acting under your own authority and deemed “execution only”. The author does not except any liability for people acting without personalised advice, who base a decision on views expressed in this generic article. Where this article is dated then it is based on legislation as of the date. Legislation changes but articles are rarely updated, although sometimes a new article is written; so, please check for later articles or changes in legislation on official government websites, as this article should not be relied on in isolation.
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