The Personal Investment Management & Financial Advice Association has warned investment scams are on the rise in the wake of the coronavirus outbreak, as consumers seek to recoup lost capital amid the market turmoil.
The trade body has launched a campaign to help consumers avoid financial scams, outlining the personal information genuine wealth managers and advisers would never seek from clients.
It comes as Pimfa flagged concerns fraudsters may move to capitalise on the financial vulnerability of some consumers in the wake of the coronavirus pandemic.
Liz Field, chief executive of Pimfa, said the current market volatility had left millions of consumers concerned about their savings, investments and pensions, and in the market for advice or guidance.
Ms Field said: "The current uncertainty resulting from the coronavirus outbreak, and what may look like quite frightening losses among savers’ portfolios, could lead to some consumers making rash decisions, or being taken in by scams that might offer them the chance to recoup those losses more quickly.
"Ensuring consumers get suitable professional advice is central to the work that Pimfa carries out.
"We will always advocate for the benefits of consumers receiving professional, regulated advice wherever possible to help protect their financial futures and it will remain one of the core pillars of what we do."
The campaign will also warn about the latest scams known to the trade body and signpost regulated financial advice and legitimate guidance to consumers.
Tim Fassam, director of government relations and policy at Pimfa, said: "Protecting the public from those that seek to exploit their financial vulnerability is hugely important, not just for the FCA but for the wealth management and advice industry as a whole.
"The true measure of success will be whether we see a change in consumers’ behaviour and whether efforts to protect them from financial predators leads to an increase in the number of savers receiving professional advice."
Last week advice giant Quilter also sounded the alarm on growing number of scams in light of the pandemic, warning fraudsters could exploit steps taken by financial services firms to offer greater flexibility amid the lockdown.
These included carrying out more transactions online, sending documentation by email rather than post and accepting digital authorisations rather than a wet signature.
In March the regulator warned of "sophisticated and opportunistic" scammers looking to capitalise on the confusion surrounding the coronavirus outbreak.
With the uncertainty currently surrounding a market in turmoil the FCA also warned scammers could advise consumers to invest or transfer existing investments into non-standard and allegedly high-return investments.
FTAdviser has carried out an investigation into how the pension scammers are getting away with it.
rachel.mortimer@ft.com
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