Client Affairs

PIMFA Scales Up Scam Advice To Worried Savers

Jackie Bennion, Deputy Editor, 9 April 2020

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PIMFA is releasing more fraud and scams prevention guidelines to help savers navigate in these disruptive markets, where predators are seeing their opportunity to strike.

Drawing attention to a rise in investment scams and how savers can protect themselves, PIMFA is offering enhanced services to alert citizens on the latest scams and how to stay vigilant.

The initiative is part of the trade association’s broad efforts to expose investment fraud and boiler room scams; its members are concerned that they are especially vulnerable to fraudsters in the wake of the Coronavirus outbreak

“With so much market volatility and uncertainty millions of consumers will be understandably concerned about their savings, investments and pensions and will also be looking for guidance, advice and information,” PIMFA chief executive, Liz Field, said.

Field warned that the prevailing uncertainty and what may look like "quite-frightening" portfolio losses at present “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.”

The group will offer specific guidance on how to avoid scams, including the personal and financial information wealth managers will never ask a client through various communication channels; the latest scams the association has been alerted to, professional advice users should seek, and who to contact in the event of suspect activity.

It said it will work with existing partners, including the Money Advice Service, the Money and Pensions Service, the FCA’s Financial Services Compensation Scheme, Action Fraud, and police authorities to collate best-practice information that will be available as part of PIMFA's Financial and Mental Wellbeing campaign.

The association that represents members across the wealth management sector warned that more work in general is needed to protect consumers from financial predators, which it said is costing consumers on average 22 years in pensions savings, or almost three times their annual earnings.

Tim Fassam, who started at the trade group earlier this month as director of government relations and policy, said the FCA’s proposal to launch a consumer campaign on high-risk investments should “learn from” its previous ScamSmart campaign to make sure that policy measures are appropriately targeted.

Protecting the public from financial exploitation is "hugely important" for the FCA and the advice industry as a whole, he said. "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."

Raised anxiety about financial wellbeing
Ways in which the regulator can safeguard investor interests were presented in PIMFA's recent Future of Supervision report. The debate between regulators and the industry on how to raise the quality of the advice market has often been a strained one.

“We will always advocate for the benefits of consumers receiving professional, regulated advice wherever possible to help protect their financial futures,” Field said. “Ultimately, the advice remains the same: If it looks too good to be true it almost certainly is.”

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