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Yvonne Goodwin: Pensions cold call reveals dubious practises

by Yvonne Goodwin on May 25, 2011 at 07:00

Yvonne Goodwin: Pensions cold call reveals dubious practises

Over the last month, since my husband took a “cold call” from someone enquiring as to his pension plans, we have been playing along in an attempt to find out what’s going on out there in this pre-retail distribution review (RDR) financial services world and whether the RDR will actually do anything about changing what are, in my opinion, sharp practises. 

The phone call came from a call centre offering the fantastic opportunity to buy agricultural land and enquired as to whether we had any old pension schemes that their IFA connections could review to establish if they were suitable to transfer into a Sipp which could then invest in this area.

Problem so far; isn’t the desire to save for retirement supposed to come before establishing what is or isn’t a suitable investment for the client?

Next up, a package arrived. Nice glossy brochure about agricultural land and a copy of an article that had appeared in The Daily Telegraph showing the past poor performance of insured Managed funds and independent advisers commenting on the wider investment opportunities within Sipps.  Having spoken to one of these advisers she is appalled that her comments for a totally unrelated article are being used in this way.

A further telephone conversation ensued in which the call centre guy then told me that the investment is totally regulated by the FSA and covered up to £48,000 by the Financial Ombudsman Scheme!  Well who knew?  It had been signed off by a well known firm of solicitors.

Next, a further letter arrived enclosing a  statement with an FSA reference at the bottom which relates to a Mifid exempt firm on the FSA register that has directors but no-one authorised to give advice(?) together with a comment saying how much agricultural land had risen over the last year according to a well-known firm of surveyors. 

A fact-find from another IFA firm was enclosed, who, according to the FSA register, aren’t permitted to give pension transfer advice.  Maybe I should phone them to enquire as to their motives in getting involved in something like this.

This was followed up by a phone call offering us the chance to talk to an IFA who just happened to be in their office. I asked for his name and again looked this up on the FSA register – inactive since August 2008.

So, I still don’t know whether their agricultural land investment is regulated or unregulated.  I’d like to know who at the FSA I should report all these findings to and will it be worthwhile in terms of whether any action can be taken or will we have to wait a few years and then find out that hundreds of people have been mis-sold and advisers like me will end up contributing towards the FSCS to bail them out when the perpetrators  are long gone.   

Just see the attached on the BBC website http://www.bbc.co.uk/news/business-13462052

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36 comments so far. Why not have your say?

Sean Kelly

May 25, 2011 at 08:21

As far as I am aware this type of investment shouldn't be marketed to the general public without first establishing that an individual is a sophisticated investor etc. which obviously cant have been done with a cold call.

I'm afraid that a lot of individuals seem to think that if a product is unregulated they can do what they want forgetting that advice is regulated even if the underlying investment isnt.

I bet when you look deeper into it you will find that the SIPP/transfer will be done on an execution only basis and that if things do go wrong you will have absolutely no recourse to the FSCS or the FOS.

As for the poor individuals in the BBC article whilst I do feel sorry for them the old addage of if it sounds too good to be true it is.

Maybe your husband should call the Money Advice Service to find out what they think of this wonderful opportunity :-)

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richard blackshaw

May 25, 2011 at 08:22

Yvonne, I had a similar case with a cold call that was made to one of my clients. On checking the website of the company I could see no reference to be regulated by the FSA. My option was to contact the FSA and report them.The FSA checked the company website whilst I was on the phone and I was assured by the FSA that they were definately going to be investigated as the FSA believed the firm concerned were acting illegally.

Unfortunately I was also told that I would not be told the outcome as it was not the FSA's policy to disclose what the end result was - my only disappointment to be honest.

In my opinion, the FSA did what they were supposed to do. This is what they should be doing - attacking the bad in our industry and not the good that need to be encouraged and helped to remain compliant.

If I were you I would be on the phone at 9am today to the FSA and save any poor client from being ripped off. Good luck!

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Greg Kingston

May 25, 2011 at 08:24

This really has very little to do with pensions, and everything to do with spivs and landbanking.

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May 25, 2011 at 08:27

A similar thing happened to me only yesterday - whilst I was in the midst of writing a very lengthy pension transfer report for a client!

Call centre automated call invited me to improve my pension arrangements, put through to someone else who talked about transferring to a SIPP which was “the best plan available due to it having more investment options than any other scheme” (I'd never heard of it!), how it had returned 15% a year from woodland, agriculture and eco-friendly investments, etc, etc.

Made me feel great staring at my seven page, laboriously constructed report!

Why can't the FSA see the wood from the trees and focus upon these charlatans instead of honest, hard-working IFAs?

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richard armstrong

May 25, 2011 at 08:32

I agree with RB. Not only do you have a ethical duty to report this to the FSA, but it would be good to get operators like this out of the market.

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Martin Bamford

May 25, 2011 at 08:33

These are sharp practices and pose a massive threat to consumers (as well as to the reputation of retail financial services).

A common theme which seems to run through these things is lots of different parties involved in the transaction.

I can only assume this is to confuse the consumer, giving the impression of some form of FSA regulation, and also to make pinning responsibility on one individual/firm when it all goes wrong much more of a challenge.

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Ian Lees

May 25, 2011 at 08:34

Yvonne, BBC moneybox has been investigating these land scheme scams ( repeated on Sat 12 Noon ). It is intereting that my understanding is "cold calling " is banned - yet banks regularly cold call with claims of " its a survey ", and other monkey business no pun intended ! THi swil always be the case where companies with large client banks will target their client bank on the basis if they "speak to" 30 people, they will get 10 appointments and 3 suckkers ( I mean Sales ). Theold business model as preferred by Banks and other tied agents. This is based on the fact that suckkers buy a product every six years - and therefore the tied agent must influence, in whatever way is necessary - to flog the product for his /her personal commission and the profits of his sponsoring company. Moving employees every six months ( as the banks do ) and hitting employees with high targets, make this most profitable for the banks - and their tied agent - whislt the consumer is not provided with ANY Reasonable or realistic form of Financial Planning - with which consumers can trust, or provide for a healthy or balanced savings or investments. HOwever, on the basis banks are in business of being money lenders one can see why it is NOT IN THE BANKS BEST INTEREST to increase the savings of consumers - and the changes implemented by RDR will NOT CHANGE THE APPROACH PLAYED BY BANKS. Put simply banks should not be permitted to advise clients - if they already have a " Lending Arm ".

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Ian Craig (Yorkie)

May 25, 2011 at 08:42

Yvonne. You MUST report this to the FSA, although it will probably take years before any real action is taken.

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May 25, 2011 at 08:47

Yvonne, well done for raising this appalling case and, in common with the others, I believe that you have to take this to the FSA without delay.

Furthermore, that our regulator should be open and transparent about clearly misleading and, potentially, unlawful cases such as this example - or does 'naming and shaming' only apply to individuals and firms guilty of relatively minor misdemeanours?

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May 25, 2011 at 08:58

Only very recently, on these threads, there was an article about Vince Cable being alerted to this, by a constituent, l think. Vince Cable was very concerned and so contacted Mark Hoban with the info. But Mark Hoban is not in the least concerned, and even referred Vince Cable to the Gov't website telling him that property such as this is not "excluded". It was on these threads earlier this month. All l now ask is who, (in due course), will fund the compensation for this.

This new article is now conclusive proof that Hoban is not fit for his job.

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Chris F

May 25, 2011 at 09:00

I've mentioned it before on here, but I have in the past reported cases with names of individuals giving advice without authorisation, of schemes being offered that are probably pyramid schemes and at best over sold scams - with evidence to back it all up.

The regulator's response?


See what happens if they check a file and the anti money laundering isn't signed, or if a copy is missing and see what they can do when they want to.

The regulator is not fit for purpose.

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Duncan Carter

May 25, 2011 at 09:09

I'm given to understand that the FSA regularly moniters aricles and blogs such as these, could someone from the FSA possibly make themselves known and pick up the baton?

This would presumably be part of the regulatory dividend?

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Mike O

May 25, 2011 at 09:09

Agree with Chris F.

The regulator is not fit for purpose.

They are more concerned with making the IFA an extinct species rather than protecting the public from genuine mal-practices.

It's a very poor state of affairs!

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May 25, 2011 at 09:14

Here is the person to contact:

Jonathan Phelan

Head of unauthorised business at the FSA

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May 25, 2011 at 09:24

@ Duncan C

I really would like to think that you are right. Unfortunately, past performance suggests that they do not even know of the existance of this blog source. SO MUCH has been put on here over many months that is obviously below the FSA's radar, and as l said earlier, even when Vince Cable raised it with Mr Mark Hoban, Vince Cable was effectively told to "Go away, dear"

Too many regualators ALWAYS means that it's someone else's job.

Too many Unregulated products are now being sold to the unsuspecting, often by non-regulated advisers. As another posting said recently, "How can they allow unregulated investments like this into a regulated product?"

Order your new chequebooks now, ready to fund the compensation. If this isn't stopped, it could be allowed to become big enough to drive the rest of us out of business. Another CERTAINTY is that the Daily Mail will blame all IFAs, and not a Tory Gov't.

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Neil Liversidge

May 25, 2011 at 09:29

If the FSA does anything I'll be amazed. I reported a scam to them yonks back and a year later the adviser concerned was still pushing it. (It's the one that was front page news in Financial Adviser - just google it if you're interested.) I also reported a guy bwho came here for an interview and who admitted (in front of my PA as a witness) that he had stolen a load of data from Lloyds Bank. Clearly he was a danger to anyone dumb enough to employ him, let alone clients. The FSA's response was "We can't do naything - would you mind telling Loyds Bank?" Basically if you are an honest overworked adviser who forgets to tick a box the FSA will be all over you like a rash, but meanwhile the crooks walk between the raindrops.

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Paul Stocks

May 25, 2011 at 09:32

Good point well made Yvonne.

I have had 2 clients approach me on this type of scheme over the last 12 months.

This type of practice needs mainstream media coverage in order to raise awareness.

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May 25, 2011 at 09:36

It does amaze me that there are so many of these schemes around and so little done about it.

Only last week a client came to see me as he had been offered a “dead Cert”, 10% plus return if he invested £10,000. The scheme was new according to this person he new very well and they already had £2 mil invested by local people. After questioning him (No real paperwork, just newspaper articles, “Commodities are good, but more is better”) it turned out to be a savings club, investing 100% in commodities. A non-regulated investment being actively sold by a retired insurance adviser that clearly has sucked in many peoples savings. When it does go wrong and it will, once again we all get tar and feathered as they are seen as “advisers”.

I would not mind paying the regulatory costs if I could see the FSA actually taking these people to task. But they do not seem to. Certainly if more where taken to task and jailed/fined and it made public, then maybe our industry could move on. It appears to me that the FSA see these scams as low impact within their overall responsibilities and unless they stray directly into their head lights they will not commit the resources. To me this is where they should be acting, as it causes the greatest damage to consumer confidence and darkens our industry as the consumer does not understand they are not protected.

Mark Holben should hang is head in shame, mark my words he will be a major problem to this Government. He seems to just go with the flow of those he believes will protect him and he thinks know better, boy is he in for an eye opener.

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May 25, 2011 at 09:38

Here we go again. What starts as a useful article with interesting follow up comments soon deteriorates into the usual anti FSA rant which is negative and is not going to go anywhere.

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Ian Lees

May 25, 2011 at 09:46

Regulation, Regulation, Regulation - and the FSA and the FOS who missed the icelandic banks, who missed the inward destruction of Edinburgh TSB and RBS, Barclays and the Co Op. At least Nero had the decency to " fiddle " while Rome burned ! - and in the UK whilst the bankers were fiddling, and the Government MP's were also caught " fiddling ", how can consumers have ANY confidence in those given the priveldge and placed in charge. The lack of corporate governance and refusal to take responsibility - and their gross neglegence - they should be removed. However, as my granny used to say " It's an ill wind - that doesn't provide someone with some good ", and all those advisers ( approx 400,000 down to some 40,000 - means that somewhere up to some 350,000 may now operate outwithout regulation without qualification and without the extraordinaryily expensive costs associated with the FSA and FOS - or as we know them the " pub advisers " ( and even the number of pubs are reducing ). Apparently, they appear to be able to act for, and/or advise, others in the absence of any regulator, without protection or Professional Indemnity and without hiondrance or guidance from the Gov't or our MP's. I wonder if we can apply the same opportunites to revitalise our motor industry ?

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Graham Bowser

May 25, 2011 at 09:52

I suspect I am but one of thousands of IFAs that get emails from operators promoting something we know is dodgy. I doubt they email the FSA so they will not be aware unless we tell them. I even had one chap (non FSA reg co) trying to sell me a pension busting scheme even after he knew I was an IFA.

It is therefore OUR responsibility to alert the FSA. Its very simple. Just forward the email you receive to whistle@fsa.gov.uk with a brief note as to your concerns.

If you dont then, when it all goes wrong, the involvement of just one naive IFA will make it another "IFA scandal" and the fact that 99% of losses incurred had nothing to do with IFAs will be lost in translation

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May 25, 2011 at 09:56

Seems absurd IFA's can be hauled over the coals for not asset allocating correctly against the clients given risk profile yet these clowns can get away with taking genuinely unsuspecting peoples hard earned life savings and put all eggs in one basket?? The fact that this practice has got thus far is equally disturbing and one would expect by the time FSA take action lots of money will be already lost and it will be up to ourselves to fit the bill...again.

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May 25, 2011 at 10:04

@ disgusted

I'm afraid these people are not "clowns" for they know well what they do.

They know the investor will lose their money

They know they will not be around when it hits the fan

They know that by introduciing unregulated investments into a regulated product, they are still behind a "fireproof" wall

They also know that there are massive commissions to be made, all 'up front'. and if they read these pages, they also now know that Mark Hoban thinks landbanking scams are quite OK to be put into a SIPP

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Charles Forster

May 25, 2011 at 10:14

I see the response from the IFa market is one of horror.

Client banks held by respected firms are called not cold as they are clients and lets not confuse the issue har it is not the coldness of the call but its content and mis-direction.

The FSA sitting in the tower with a book of excuses to its failings to stop these sorts of practices. Its easier to pursue the IFA who pays his way and treats his clients with respect and care.

Buyer beware the future is going to hold more threats to good business and the public alike.

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May 25, 2011 at 10:26

@ Anitaki

I am well aware of how these operation are run also.

Maybe "parasites" would have been a better word to use

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May 25, 2011 at 10:36

JHA a fair comment.

I am not anti regulation, I am not anti FSA, FSCS or any part of the system. However, what these site are showing is that there are major problems, this article highlighting just one of them.

I agree with many of the comments above.

Health debate is a good thing, do like I did yesterday when it all got a little silly and some started name calling, click off the e-mail comments.

Let's hope that the powers that be do read these blogs, which I am sure they do. Maybe just maybe some good will come out of them.

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Phil Castle

May 25, 2011 at 11:28

Just two things to add as everyone else has written most of what I would have said.

1. When reporting to the FSA, make sure you get the name of the person you reported it to and ask who the department head is it will be referred to. Ask for confirmation that they are made aware of your concerns and that the fact you reported it and who to has been noted. IF the FSA fails to take action and consumer loose out and the FSCS does not (as we believe is the case) cover the losses, then despite Hector Sants stating they are bullet proof, they are NOT if it can be proven that there was malfeasance in public office, i.e. someone chose to ignore it. It will just take the will and perseverance of one IFA combined with a consumer who looses out who has money to pursue a legal case.

2. If the marketing included an extert from a newspaper, then that has to be paid for and licenced, so I would report it to the newspaper too so they can pursue payment AND right an article criticle of the promoter.

3. I know I said there were only 2 points! How stupid are these companies, don't they realise that many people now record phone calls. You can do it with hardware or simple software if you are using skype and the sales practices can be PROVEN, no benefit of the doubt or one persons word against another. Idiots.... mind you getting rich and run rather than work hard, be honest and get shafted by the FSA, so perhaps I am the fool.

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Julian Stevens

May 25, 2011 at 11:35

I really wonder just how many non-Unit Trust investments made via SSIPS and/or SSAS's achieve better performance over the medium to long term than a carefully selected and regularly monitored porfolio of Unit Trusts. The costs of investing in non-Unit Trust assets are often higher as well, not least when you add the fees charged by solicitors and all the other third parties which have to be involved. Is it reallty worth it?

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May 25, 2011 at 11:43

@Julian - have often wondered that too - sometimes people lose sight of the fact that a SIPP is ultimately a savings vehicle for their pension provision.

BTW - Love the (American) Freudian slip there - is it realty worth it?

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Premier Shareholder Group

May 25, 2011 at 12:12

A big thanks to Yyonne Goodwin for highlighting this dishonourable matter. And an equally big thanks for ALL the intelligent responses posted by people who are on “the sharp end”.

Non-regulated investment products designed specifically for professional, high net worth, experienced investors only are being sold to retired plumbers, road sweepers and van drivers who are spun a load of bullshxt not by the IFA but by the product providers themselves And the only excuse these pathetic conmen can come up with is “buyer beware” knowing full well that consumer law has moved on from the “caveat emptor” model (which was often used as an excuse to totally misrepresent products) and is no longer applied in UK law.

In the majority of cases it is not IFAs that hurt people, but rather avaricious product providers who (by publishing misleading documents and using dishonest sales methods) knowingly accept bank transfers from people who could never in a million years be described as “experienced investors” but as a result of being conned place their life savings in a totally unregulated product. The FSA should take immediate and decisive action to forcefully prevent this fraud continuing.

Thanks to you all for some very constructive observations/ideas.

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brian hammond

May 25, 2011 at 12:50

Please remember that it was mostly UNREGULATED advisers linked to the TREASURY that advised local authorities and charities to invest millions in the Icelandic Banks !!!

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Stevie P

May 26, 2011 at 09:13

FSA - more chance of protecting the public if you speak to Martin Lewis (sadly). Perhaps our Levy should go to him !!!

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Terence O'Halloran

May 26, 2011 at 15:44

Well done Yvonne, consensus is a great tribute to your tenacity. FSA ! The ball is in your court. Oh! nobody qualified to deal with it. There's a surprise.

C'mon 'journos' this is bread and milk for you , surely.

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l'ifa passeport en provenance de France

May 26, 2011 at 16:45


Lots of responses well written, anyway it seems to me that as regulated company’s we have to adhere to high standards comprehensive reports and high costs etc. .

It’s not just your example ,I think we all have similar stories. My concern is that a lot of activity regarding pensions is being done by non reg persons , I also have come across a previous regulated individual who now is selling the loan back scheme based in Spain i.e. getting 50% out of your pension through a occupational scheme. The selling methods are a lot to be desired , unauthorised payment maybe?

It totally makes a mockery of regulation and really wonder what the FSA plan on doing? Or are they going to say it’s an Inland Revenue issue. Come on FSA pull your fingers out.

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Ian Lees

May 28, 2011 at 09:38

For the record, I have reported Scottish Widows employees to the FSA and their " professional awarding body " ( according to Mr O Shea ) the CII for telephoning our clients direct and providing advice - when theyhave no Fact Find, No Terms of busines signed and provide no KEY FEATURES. Clearly if these activites are permitted by Scottish Widows - then it is unlikely the FSA will do anything about others.

We request informatin using our Mandate of Authority signed by our client. Scottish Widows refuse to provide information - and then telepone our clients direct, and provided restricted advice - without any client relationship, client knowledge - as many of these cleints have been missold Endowments Pensions Investmetn Bonds with high commissions - and clearly Scottish Widows just want them off their books, and are collecting names and addresses - for the introduction of their next attempt at a Tied Agents - Salesforce. Apparently the " Penny his'nae dropped " in Edinburgh that eh old business model of commission remunerated salespeople - has gone and it is professional advice that serves most people best - and the banks selling Endowments Pensions Bonds and PPI for commisions demonstrate the lack of client relationship - and rely entirely of large numbers of names and addresses - for the " Widders " weaning salesfolk on the unsuspecting public.

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Premier Shareholder Group

May 31, 2011 at 19:10

@ l'ifa passeport en provenance de France


Check that the "product provider" licenced/registered its product with either one or both of the Spanish government financial services regulators - the CNMV and the DGS – before commencing “sales” of the product.

If the “product provider” has not made this provision then the “product provider” imported its product into Spain illegally and there is no way that it can be sold legally.

All illegal sales of financial products are null-and-void and the victims should receive the return of their money - plus compensatory damages.

The Spanish government could demand that the “product provider” forwards a full list of victims to the county’s regulators to ensure full and proper restitution is made.

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