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02 Feb 2017
by Adrian Firth

Are your employees being targeted by investment fraudsters?

It’s the bane of our lives receiving the outbound calls from providers of accident compensation, solar panel providers, and PPI tracing services. Not only are our home telephone lines targeted by these cold callers, but there has been a significant increase recently in mobile numbers being targeted too.


Not wishing to be the bearer of bad tidings, but it appears that things are set to get even worse.

In a recent report published by the Financial Conduct Authority (FCA), it was revealed that the current low interest rate is playing a big part in driving the over 55 average investor to consider unfamiliar types of investment product, with 4 out of 10 people reporting a sharp rise in unsolicited investment calls, and cold calling increasingly becoming the preferred method used by investment fraudsters. 

Previous FCA research has shown that over 65s with savings in excess of £10,000 were three and a half times more likely to fall victim to investment scams compared with the wider population.

With the new pension freedoms for over 55s now firmly in place, it seems inevitable that this fraudulent activity is set to increase dramatically, with unregulated firms selling unregulated products, predominantly linked to land development, fine wines and modern art.

Employers should be aware that many of those targeted are members of their pension schemes and that perhaps they have a duty of care to make our ‘baby boomers’ aware of the potential risk to their valuable future income. 

With one in five employees planning to access their pensions at age 55 whilst still in full time employment (therefore compounding potential shortfalls later in retirement), it’s become more important than ever to help employees understand pensions and their new freedoms.

The Pensions Regulator guide

To help better protect people’s pensions The Pensions Regulator has provided a guide that includes the following tips: 

1) Being wary of cold calls and unsolicited texts or emails.  

Scammers will often claim to be from a government-backed body such as Pensions Wise. These organisations will never phone or text you to offer a pension review.

2) Checking the financial adviser is on the Financial Conduct Authority (FCA) approved register. 

Pension scammers often pose as financial advisers. They might not be authorised and might be a referral for a separate organisation.

3) Check the FCA’s list of known scams.

The FCA has confirmed that £1.2 billion is lost to investment scams in the UK each year, and experienced investors are often targeted. The FCA Scamsmart site recommends that individuals reject unsolicited calls and check any investment strategy against the FCA warning list advising that if it sounds too good to be true, it probably is.

4) Do not be rushed into a decision. 

Scammers will often try to pressurise you with time-limited offers. Take time to make all the checks you need even if this means turning down the too-good-to-be-missed offer.

Most pension providers will have internal processes to deal with unusual and nonstandard investment strategies. However, as indicated by the FCA, if it looks too good to be true, it probably is.

Adrian Firth is employee benefits wealth consultant at Mattioli Woods.

This article was provided by Mattioli Woods. 

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