Personal PensionApr 29 2013

Adviser writes to FCA over pension liberation Sipps firm

Search supported by

A financial adviser has reported an alternative investment firm that claims to offer early access to pensions and that also offers investment via self-invested pensions wrappers to the Financial Conduct Authority.

The website of investment firm Chase Goldman states that savers can transfer their pension into its ‘pension trust’, which would offer access to pension funds at any age. It specifically states that investors “do not have to be of retirement age”.

The website states that “full disclosure” is given to HMRC.

Late last week, HMRC published a fresh warning on pension liberation firms, warning that there are “no legal loopholes” to access pensions early.

HMRC previously told FTAdviser that investors should stay “well away” from pension offers that claim to be able to provide loans or release tax-free cash from people’s pension pots before they reach age 55.

HMRC warned that the total tax charge on an unauthorised payment can amount to 70 per cent. Only limited exceptions apply to allow early access, such as in cases of severe or terminal illness, HMRC added.

Chase Goldman says it specialises in alternative investments, especially from investors who have a frozen company or personal pension that can be transferred into a self-invested personal pension.

The website says that due to high management charges and low return on investments, fund based pensions and investments “are fast becoming a thing of the past”, citing that alternative investments can offer higher returns.

Chase Goldman classes an alternative investment as commercial property, fine wines, art, land, overseas property UK care homes and student accommodation, and it says it does not invest in traditional investments of stocks, bonds and cash.

The website clearly says that it does not give advice and, that for pension transfers and the setting up of a Sipp, it will refer you to an IFA who is regulated by the Financial Services Authority.

A financial adviser, who wishes to remain anonymous, reported the company to the Financial Conduct Authority for pension unlocking.

He said in the letter: “I thought the FCA were supposed to be looking very seriously at any firm promoting pension unlocking before age 55?

“I really hope you [the FCA] can start to get to grips with these firms who are advertising and encouraging people to undertake pension transfers... and who then help the individual ‘access their pension ar any age’.

“One does have to wonder what the point of the RDR was if we all had to move to level 4 and then these firms go round doing this; no authorisation, probably non-retail consumer suitable products and no regulation.”

Greg Kingston, marketing director of Sipps provider Suffolk Life said the FCA had previously expressed concern over companies offering self-invested pensions in this way in an apparent effort to drive funds into alternative investment schemes.

He said: “They are a vertically integrated Ucisprovider, something the proposals in CP12/33 are designed to either eliminate or make much safer. And rightly so.

“These types of firms aren’t really a Sipp company but are investment companies that also operate a Sipp purely so they can get pension money to invest in it as well as other funds.”

A spokesperson for HMRC told FTAdviser: “Any one flogging pension liberation schemes is selling misery and pain to the poor individuals who transfer their funds to them

“As well as facing 55 per cent tax charges on the whole drawdown including the fees charged by the pension liberation scheme, they will be left in penury in their latter years.

“The rules have always been clear, pensions are long term savings vehicles not to be touched until retirement.”

Chase Goldman did not respond to repeated requests for comment.