Financial Adviser’s in-depth reporting into the evolution of pension scams has thrown up some interesting and troubling information.
As news editor Carmen Reichman has revealed in her serialised exposé of the nature of financial fraud in 2020, the snake-oil sellers have become much smarter in how they go about flogging their dodgy wares.
It’s not just the official-seeming emails or texts, which lure people into a false sense of security, but also the way investment schemes are now promoted.
Ten years ago, the financially savvy mocked anyone putting 70 per cent of their portfolio into a non-existent Costa Rican teak plantation.
Certainly no reputable financial adviser would dream of recommending such products.
But now the investment returns seem more realistic — high single-digits that, when plotted against cash or bonds on a graph in an official-looking document, do not seem unattractive or ‘too good to be true’.
Unregulated salesmen also now use words like ‘financial security’, ‘cautious investment’, ‘safety’ and ‘diversified’ — buzzwords that lull the unwary into a false sense of trust.
As scammers wise up to the wording, so we must wise up to the scammers. But we must also be wise to the machinations of government and policymakers, whose fine words often mask complete ignorance of the market.
Letter after letter has come in from self-employed people who have “fallen through the cracks” of the chancellor’s relief package. Many fear losing their livelihood, their homes — even their lives.
The markets may have drunk the Kool-Aid but ordinary people are choking on it.
So much is already asked of advisers — but we ask again: can you, will you help?
Simoney Kyriakou is editor of Financial Adviser