Advisers share tips on fighting financial fraud

Davies commented it was important to "educate them as best you can, build a great relationship with your clients and make them understand if something is too good to be true then it usually is".

Some highlighted that banks and others are promoting financial advice, attempting to get customers to think twice before giving money to someone over the phone or via email. 

Christopher Lean of Tailor-Made Pensions, said: "Tell then to speak to someone they trust", and tweeted the following screengrab from Barclays, which tells people to speak with their financial adviser - although it was noted the sentence could have been phrased better, perhaps "Speak to someone you trust, such as your financial adviser" rather than what one commentator called the "classic 'or'".

Ultimately, according to the various commentators, it is all about being the sort of person who communicates with their clients, earns their trust and builds up a mutual respect through the relationship.

As financial educator and former adviser Richard Bishop commented: "If you're a good adviser who keeps the client close, they'll always to come to you first."

Scam statistics

Their comments came as analysis of official scam data from Phoenix Group showed 17 per cent of UK consumers have fallen prey to a scam or fraudulent activity in the past year, with 29 per cent of those losing money as a result.

But breaking down the statistics between the genders revealed men lost more than double the amount that women had over the past 12 months. The analysis showed:

  • Men have lost £2,780 each on average in the last year, while women have lost £1,133;
  • The average amount of money UK consumers lost to scams was £1,988 per person;
  • The figures were more startling among the older generation, with the average loss per person rising to £4,073 for those aged over 55;
  • 11 per cent of  scam victims did not take any action once they realised that they had been targeted by fraudsters;
  • Only a third alerted their bank or reported the activity to authorities;
  • Just 21 per cent warned their friends and family;
  • Fewer than half (44 per cent) changed their personal details such as passwords.

Tommy Burns, risk and financial crime manager at Phoenix Group, said: “There’s been a flurry of scams in the last year, with fraudsters taking advantage of the pandemic to target an increasing number of victims.

"Many people are losing significant amounts of money to scammers, yet not all victims take action and report suspicious activity, leaving themselves and others susceptible to further fraudulent activity."

Talking to FTAdviser, Cumbria-based financial adviser Ruth Power said while her company, Financial Management Bureau, provides regular features in client newsletters and shares the Money Alive video link on scams (as detailed by FTAdviser in July this year), the majority of problems relating to scams do not appear to be sophisticated investment frauds. 

She explained: "I don't think investment scams are the issue for clients, as they delegate it to us. Telephone and email scams such as the Covid/HMRC/Amazon fakes are the problem."

But even these should be flagged as "suspicious activity" and reported immediately, according to Tommy Burns. 

He said: "For victims of financial fraud, the first port of call should be to inform their service provider who can take whatever steps are possible to protect their money.