Advisory firm Charles Derby has sparked criticism from rival advisers after offering a voucher for a pension review service - which it says is worth £295 - for just £12.
The cut-price deal from the firm, a member of the Intrinsic network, gave savers a one-hour consultation in person or on the phone through website Wowcher.
An advert on the money saving website said: “If you want to make sure your future is bright, let the professionals give your pension plans a thorough going over.
“The financial advisors at Charles Derby group can give you a pension review by contacting your existing providers for information and giving your plan a good analysis.
“They will be able to take their expert eye and use it to suggest improvements so your best interests are kept at the heart of your plan.”
More than 250 people bought the voucher, according to the website. The deal has now expired and is no longer available.
A spokesperson at Charles Derby said the firm hoped the vouchers would attract people who would otherwise not consider seeking financial advice.
“Research has shown that people are unwilling to pay for financial advice, but once they receive it they acknowledge its value”, they added.
But financial advisers branded the ad ‘salesman tactics’ and no different from non-contingent charges, a way of charging for advice where the adviser only gets paid if a recommendation goes ahead which is currently under the scope of the Financial Conduct Authority (FCA).
Darren Cooke, chartered financial planner at Red Circle Financial Planning, argued that the cut-price deal must be costing Charles Derby, unless they are very confident of a bigger fee after the initial review.
He said: “The only way that they're going to make money is if they find something they can sell [to these clients].
“Either we are a profession and try to be professional, or we are salesman.”
Steve Carlson, chartered financial planner at Cardiff-based Carlson Wealth Management, said that “many firms offer low cost or free pension reviews, either to look at the pension in isolation and charge a contingent fee if the client transfers it, or as a door opener to more complex and holistic advice”.
He added: “Firms offer different levels of service and market themselves differently, but one thing is for sure – you can’t give unbiased advice that looks at the clients’ entire situation in one hour for £12!”
Martin Bamford, chartered financial planner and managing director of Informed Choice, this is “an interesting and innovative piece of marketing from Charles Derby”.
However, “what consumers using Groupon and other sites like this might not appreciate is this is contingent charging,” he argued.
He said: “There’s no way Charles Derby can cover the cost of providing the advice for £12, or probably even for £295, so they will be writing it off as a marketing expense and hoping they can implement enough pension transfer cases to make it profitable.