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Unregulated Pension Introducers

In many mis-sold SIPP cases, Unregulated Introducers are common. Introducers are fundamentally firms who cold-call people and provide free pension reviews.

The purpose of these reviews is to persuade people they will be better off in retirement if they move their pensions into a certain investment. They may then refer to a regulated financial adviser to facilitate the transfer.

The Introducer will usually earn a commission for doing this.

They have caused huge losses for thousands of people who unknowingly transferred their money into unsuitable, high-risk after following their “advice”.

The FCA does not authorise Unregulated Introducers to give financial advice, which means they don’t have to act in the best interests of the consumer. It also means you can’t seek compensation for mis-sold pension advice from these companies.

This is what the FCA dont like, most of all…

The main bone of contention for the FCA is when the Introducer has an inappropriate influence on investment choices. Why does this matter you, you might ask? Two reasons, mainly:

The first is that these Introducers are not qualified to give sensitive Financial Advice – and they do just that!  It is like the vending machine repair man attempting to diagnose an ill patient.

The second, more sinister reason is that unregulated Introducers are often linked to high-risk and exotic schemes with excessive costs, some of which may be hidden. The more they can get the consumer to sign up for, the more commission they receive. That is to say, Introducers are not bound by a duty of care as regulated Financial Advisers are. The FCA uses the phrase: “Acting in the consumer’s best interest.” Introducers are infamous for acting in their own best interest. What matters is: leads, sales and commission.

This is what the FCA say:

Many authorised firms we have visited do not have adequate input or control over the advice they are ultimately responsible for giving to customers.

An authorised firm which accepts business from an Introducer must meet its regulatory requirements. The authorised firm may be held responsible if:

Unregulated Pension Introducers and Cold Call Pension Reviews

If you are one of the many people who received a “cold call” offering a Free Pension Review, then it’s more than likely that you were speaking to an Introducer.

The outcome of these pension reviews is usually a recommendation to invest in a product for which the Introducer will receive a commission if the investment is made. The investment may not be FCA regulated.

The client will then be passed on to a regulated Adviser or SIPP provider to undertake the transfer or investment.

Unfortunately, following these recommendations has led many people to place their pension funds into unsuitable investments such as Car Parks, Store Pods, Overseas Developments, to name a few. This is quite often done through a SIPP pension transfer.

Cold calling was banned by the government in 2017.

Unregulated Pension Introducers and Advisers

It’s quite common in pension and investment mis-selling, for the Introducer to pass the client on to an Independent Financial Adviser. The IFA then advises on the SIPP transfer, but not on the unregulated investment.

However, as part of their regulated duty, they should also consider the investment part of the advice they have given.

Unfortunately, many advisers either didn’t realise this or purposely turned a blind eye and facilitated transfers that should’ve been deemed unsuitable because of the investment in the SIPP.

It may also have been the case that the clients existing arrangement better suited their personal circumstances. This would also mean advice to transfer may have been unsuitable.

SIPP Providers and Introducers

Many SIPP providers accepted business from unauthorised introducers on the basis that they would not be liable for any investment advice and that the SIPP was simply a way to enable the client to choose investments on their own or with the aid of an IFA.

However, successful claims are now being made against SIPP providers and it is clear that the FCA rules mean as a regulated entity they are responsible for applying adequate due diligence to the investments in their SIPPs and any 3rd parties they accept business from.

Can I claim against an Unregulated Introducer?

Unregulated Introducers fall outside of the FCA’s jurisdiction. This means it’s harder to hold them accountable.  It also means if the company has failed you can’t access the Financial Services Compensation Scheme (FSCS).

However, regulated Financial Advisers and SIPP Providers are subject to FCA rules, so if they were involved in your pension transfer or investment, you may be able to make a claim.

You could have a case against the Adviser or SIPP provider if they have failed to act in your best interests. For example, by giving you unsuitable investment advice. Or exercising insufficient due diligence in respect of accepting your business or the investment involved.

If you’ve taken up the offer of a free pensions review, or any of the above names seem familiar to your current investment, you’d be wise to check, as you may be able to make a claim.

Read Arthur’s story. He was cold called by unregulated introducers and persuaded to move his pension.

How to check if you’ve been mis-sold?

A simple way is to get in touch and have a free assessment by one of our mis-selling assessors.

It’s a brief chat in which we can tell you if you may have a case and how you can make a claim. There’s no obligation to use our service. See our Trustpilot reviews here.

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Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.