Pension scams: Why adviser vigilance remains critical

Despite increased regulatory scrutiny and greater public awareness, pension scams remain a persistent threat to retirement savings. While traditional cold-calling tactics have largely disappeared, fraudsters have adapted their approach, often presenting themselves through professional-looking websites, social media advertising, investment seminars and seemingly legitimate introducer networks.

For advisers, one of the challenges is that many scams no longer fit the stereotype clients might expect. Rather than offering obviously unrealistic opportunities, fraudsters often position themselves as credible investment specialists or retirement experts, using sophisticated marketing techniques to build trust before discussing pension assets.

Protecting clients from pension scams is no longer simply a compliance exercise, it’s an important part of delivering ongoing client value. The FCA continues to highlight pension scams as a significant consumer risk and maintains dedicated consumer guidance at https://www.fca.org.uk/consumers/pension-scams.

Why clients remain vulnerable

Scammers have become increasingly sophisticated in their approach. Rather than relying solely on traditional cold-calling tactics, fraudsters now utilise:

• Social media advertising
• Investment webinars
• Online lead generation
• Clone firms
• Professional-looking websites
• Introducer networks

Clients approaching retirement or considering pension transfers can be particularly vulnerable, especially during periods of market uncertainty.

How to counter these new threats and add value

Many advisers already discuss investment risk, tax planning and retirement objectives as part of their regular review process. Incorporating scam awareness into these conversations can provide an additional layer of protection, particularly for clients approaching retirement or considering significant pension transactions.

Simple reminders can often be highly effective. Encouraging clients to independently verify the regulatory status of firms and investment providers through the relevant regulator in their jurisdiction, question any claims of guaranteed returns, and seek a second opinion before proceeding with unfamiliar investments can help prevent poor decisions being made under pressure.

Importantly, advisers should also be mindful of clients who may not initially disclose approaches they have received. Some individuals may be reluctant to discuss unsolicited investment opportunities, particularly if they have already engaged with a third party. Creating an environment where clients feel comfortable raising concerns can help identify potential issues before irreversible decisions are made.

Using FCA resources

For UK-based clients, useful resources include:

• The FCA’s Pension Scams guidance
• The FCA Register, which allows consumers to check whether a UK financial services firm is authorised to carry out regulated activities
• ScamSmart, which provides practical guidance on identifying common scam tactics and warning signs

For clients outside the UK, advisers can encourage similar checks using the relevant financial regulator or supervisory authority in the country where the firm or investment is based. Taking a few minutes to verify regulatory status before making investment decisions can be a valuable safeguard against fraud.

A shared responsibility

Protecting consumers from pension scams is a shared responsibility across the industry. Regulators, providers and advisers all have a role to play in reducing consumer harm and improving awareness.

For adviser firms, this means remaining alert to emerging scam trends, maintaining robust due diligence processes and ensuring that clients understand the risks associated with unsolicited investment opportunities. While no system can eliminate fraud entirely, proactive engagement and regular communication can significantly reduce the likelihood of clients becoming victims.

As scammers continue to adapt their methods, ongoing vigilance and client education will remain essential components of good retirement planning.

Disclaimer

The content of this article is for general information purposes only and should not be construed as legal, financial or taxation advice. You should not rely on the information contained in this article as legal, financial or taxation advice. The content of this article is based on information currently available to us, and the current laws in force in the UK. The content does not take account of individual circumstances and may not reflect recent changes in the law since the date it was created. It is essential that detailed financial and tax advice should be sought (as well as legal advice where required) in both the UK and any jurisdiction where you are resident.

iPensions Group Limited is authorised and regulated by the Financial Conduct Authority, Licence Number 464521.