Zurich has issued a fresh call for the government to clampdown on pension scammers, pressing for tougher regulation of introducers to help safeguard consumers.
The firm has proposed that introducers could be contractually linked to authorised independent financial advisers or pension schemes as part of a series of proposals surrounding pension scams.
If introducers are affiliated with a regulated IFA or pension scheme, they would have to adhere to Financial Conduct Authority standards.
As such, introducers would only be able to make cold calls on behalf of the firm they are authorised by.
Additionally, Zurich called for an assessment of the impact of an outright ban on cold calling related to regulated financial products.
Finally, it suggested referral fees between introducers and pension schemes should be fully disclosed or banned altogether, as they are between claims management companies and solicitors.
Iain Mills, UK operational taxes director for Zurich UK Life, said stronger regulation is needed to protect consumers and their retirement pots.
He said unregulated introducers offering free pension reviews, which can be confused for advice, are often the link between savers and potentially risky schemes.
“Scant regulation around introducers means consumers could be just a phone call away from losing their retirement savings.
Scant regulation around introducers means consumers could be just a phone call away from losing their retirement savings. Iain Mills“Raising the regulatory bar could help force illegitimate introducers out of the market. By cutting off unscrupulous cold callers, we estimate there would be a 90 per cent reduction in transfers to dubious schemes where people’s money is at risk.”
Mr Mills suggested Pension Wise could play a role in helping to warn consumers about the risk of transferring their pension to potentially fraudulent schemes.
Where providers suspect the receiving scheme is a scam, customers should seek impartial guidance from Pension Wise or a regulated adviser, before the transfer can proceed.
Mr Mills said:“This would provide an extra layer of protection to consumers and their life savings.
“A robust regulatory regime should be in place to combat scams before the launch of the pension dashboard, or it could be open season for criminals,” he added.
“We hope these suggestions lead to a wider debate on ways that the government, regulators and businesses can better protect consumers from pension scams.”
Alan Solomons, director of Alpha Investments and Financial Planning, said in the main Zurich’s approach was right.
He said: “Introducers should not be allowed to anything more than introduce a client to an IFA.
“They should not be doing anything other than that unless they are professionally qualified lie solicitors or accountants where the advice thy are giving in within their sphere of activity.”
A government spokesperson said:“The government takes the threat of pension scams seriously, and is committed to protecting all pension savers including those seeking to access their pension freedoms.
“We are working with Pension Wise, the FCA and the Pensions Regulator to raise awareness of scams; and through Project Bloom working to stop increasingly complex scams and expose scammers.”
“A dashboard to allow consumers to see all their pensions in one place will be hugely beneficial for consumer engagement with pensions, is widely supported by the industry, and already exists in other countries. The government will monitor closely any potential for new risks to emerge as the dashboard is developed.”
ruth.gillbe@ft.com
