FCA pension scam crackdown relevant for expat investors

Britain’s financial regulator has announced its main priority for 2016/17 is a crackdown on pension-related investment scams.

Although the Financial Conduct Agency has no jurisdiction outside the UK, its prioritising of pension scams gives valuable information both to UK citizens looking to retire overseas and those already abroad. It’s well-known that unregistered pension scammers operating illegally online from bases in the UK are targeting elderly expats overseas as well as in Britain.

The FCA’s announcement of its current business plan stated that last April’s pension reforms had created a huge market for scammers, putting high numbers of inexperienced investors at risk of losing their retirement nest eggs. The regulator’s website now holds details of its recently-launched ScamSmart crime prevention campaign along with advice on how to check out IFAs who approach newly-retired investors.

Those already living overseas should be aware that a common practice for pension and investment fraudsters working popular retirement destinations is to claim a UK-registered business, saying that investments are therefore protected by the FCA. Checking the information given is essential as, even if a registered UK company does exist, the registration may well not include permission to sell certain investments. Also and most importantly, should misselling or fraud take place outside the UK, the FCA is unable to act.

For retirees planning to emigrate overseas but still living in the UK, it’s even more necessary to double-check the qualifications, registration details and experience of any financial advisor, especially if he or she has approached you through cold calling or your request for an online pension review. The FCA’s warning list gives more details on how to proceed with such checks, and is to be regularly updated as part of the ScamSmart campaign.

Reputable professionals in the field of financial advice and money management are now recommending that would-be expats with freed-up pension pots are better off arranging their investments with a fully-registered and qualified advisory firm whist still in the UK. Top-quality advice and management costs money, but can avoid disaster in the long term.

For retirees already overseas, fee-only, non-product advice from an IFA who holds at least level 6 qualifications and professional indemnity insurance is the way forward. However, finding such a treasure in many favourite overseas destinations is another matter.

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