Clients are warned that the new pension reforms, which now allow pension funds to be treated almost like a personal piggy-bank, are likely to lead to an upswell in attempts by shady financial advisers to help themselves to the nest eggs of the elderly or vulnerable.

There is already a regular flow of cases running through the courts involving thefts of assets by unscrupulous financial advisers. Most of these have a similar background story – an offer of investment returns above the market average.

In a recent Scottish case, an investment adviser stole nearly half a million pounds from an elderly couple who entrusted him to look after their investments. He was caught when he took £80,000 from them with the promise of a guaranteed return of 5 per cent – well above the available market rates.

Although the couple eventually got their money back from the insurer the financial adviser worked for, they had to bear the uncertainty and worry that inevitably follow the discovery of such a fraud.

It is worth pointing out that had the adviser not been the agent of a reputable and UK-regulated company, the investors may well have lost out: the adviser had used the money stolen from them to meet his considerable debts.

With large pension pots now ‘in play’ for fraudsters, it is sensible to be even more cautious than usual if you are offered a ‘great deal’ on any investment. Unsolicited calls offering ‘ground floor’ opportunities and investments offering above market rates of interest should be treated with extreme suspicion. It should be borne in mind that not all investments offer any form of buyer protection and criminals will go to great lengths to appear credible.

The fraudsters will do their research and will target people they think are likely to be vulnerable. If you have a family member whose assets may be at risk to a scammer, there are steps you can take to protect them, such as placing assets in trust, getting the family member to appoint an attorney over their assets or making sure that their assets are managed by a reputable and qualified firm.

Authorised financial advisers can always provide the credentials necessary to prove their bona fides, and it is relatively easy to check that they have the accreditations they claim.


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