guide to pension mis-selling

7/23/2019 Guide to Pension Mis-selling

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Pension Mis-selling

Produced by My Champion for Readers Digest.


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My Champion is Licensed by

the Ministry of Justice to

support consumers whohave been mis-sold Pensions

or Investment products

An Introduction to My Champion

Financial Services products are very complicated

and Pensions are particularly difficult to fully

understand unless this is your area of expertise.

When something goes wrong the reasons why it

went wrong and what that means for the customer

is often very technical and requires an in-depth

understanding of the industry and the specific

products involved.

My Champion was set up to provide advice and

support for consumers who feel they may have

been mis-sold a pension or investment product.

My Champion is licensed by the Ministry of Justice

and provides independent, discreet, open and

honest, non intrusive and unbiased advice to

consumers on complicated and technically difficult

areas of financial mis-selling.

Our mission is to empower customers to fight for

their rights, helping to restore the balance of

power.

Think of us as a trusted and expert champion whostays by your side and acts on your best interests

every step of the way.

"Our Mission is to empower

customers to fight for their

rights helping restore the

balance of power."


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There are many types of financial services mis-

selling that don't require the use of a service such as

My Champion, PPI being the most obvious; however

there are also many areas where a claim can be very

time consuming even if you have the technical

knowledge yourself.

Our aim at My Champion is to support Readers

Digest readers that are concerned they may have

been mis-sold and provide them with the support

they need to get appropriate levels of redress.

The Financial Services industry makes a

massive contribution to the UK. It is one

of the largest employers and wealth

creators for the treasury and globally

one of the UK's strongest sectors if not

the strongest. In addition, we

forget sometimes how integral

to our lives Financial Services

is. We use our banks and

insurance products everydayand 99% of the time

everything works as it should.

My Champion is not here to knock the Financial

Services industry but is here for consumers when

things go wrong and when a company you trusted

needs to be held to account.

If after reading this brochure you feel you may have

an issue , its worth giving us a ring and we can talk

it through with you. You won't be wasting our time

even if all you want to do is ask some technical

questions.

Readers Digest introduced our service to their readers beacuse they know we can be trusted to

look after their readership with absolute professionalism

Readers Digest RecommendedMy Champion is a partner of Readers

Digest

We are an expert guide

We are here when your claim is

complicated and time consuming

99% of time things work

Were here for the 1% that go wrong

Give us a call

If your not sure if your affected or

your certain you are give us a call and

we can help

0800 3800 090 FREE


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What Is Mis-Selling?

One of the problems with Mis-selling is it conjures up a lot of misconceptions and covers a wholerange of areas many of which are not relevant to most customers.

Firstly and most importantly Mis-selling is very rarely fraud or a crime; if it is then your first portof call should be the authorities.

With Mis-selling most often we are talking about bad advice or bad process leading to apoor outcome for a customer.If you think about the analogy of your garage looking afteryour car; We as consumers have to trust that the garage gives us the right advice and the rightsolutions to the problems we have. If the garage replaces the gear box and all we needed was anew engine sensor we have been mis-sold! It doesn't matter if that advice was intentionally

misleading or due to incompetence , you as the consumer can rightly consider that they have notfulfilled their contract with you.

With modern car engines it is virtually impossible for the customer to know whats actually goingon under the bonnet without owning the appropriate computer equipment, so we have to relyupon the advice we are given. Financial Services products are very similar, Pension and Investmentproducts are complicated and unless you are in the industry you need to trust that the companyyou deal with is looking after your best interests. It is generally their responsibility to make surethat the product you buy is appropriate and you as a consumer should not in anyway feel that itsyour fault if you have ended up in the wrong place.

"Mis-Selling is bad advice or bad process leading

to a bad customer outcome."


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Over the next few pages we will highlight someof the key areas of mis-selling that exist today.

Often it is an industry practise that is out of linewith the requirement for Financial Servicescompanies to Treat Customers Fairly.

A key example of this is annuities, where a largeportion of the mis-selling is simply due tocompanies intentionally (or otherwise) notinforming customers fully of the choices theyhave.

In so doing customers have ended up withsmaller pensions that they could have had. Thisis a massive issue and hundreds of thousands ofpeople are going to be due compensation.

The golden rule is never feel embarrassed byhaving been mis-sold. These are normally verytechnical issues and the company you are dealingwith has let you down and needs to put it right.

"The Solution is to understand what the

issues are in the first place and then

what steps you can take if you are

affected."


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"Annuity Mis-selling:1in 4 Pensionerscould be entitled to a larger

pension!"

What is an Annuity?

An annuity is where you take a pot of money,

normally from a pension savings plan, and exchange

it for a guaranteed income for life.

The key with an annuity is what exchange rate you

get for your money. i.e. For every 10,000 you give

the annuity company, how much income will they

give you for life?

This is generally a once only decision i.e. Once you

have bought the annuity thats that (note: recentlythe government have raised the idea that you might be

able to move annuities between providers although the

details of this are not finalised yet)

Buying the annuity is often the most critical

decision in all your pension planning. Unless you

have been in a Final Salary pension scheme (which

is rarer and rarer these days) your pension will at

some point have been converted to an annuity or

you will want to consider this option at some point

during your later years.

Taking advice at this stage is critical as there are

lots of potential annuity providers.


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One of the biggest mis-selling scandals in the financial

industry is that companies did not inform consumers

that they had the right to move their pension pot to

another annuity provider and get potentially a larger

pension. Companies did this because they wanted tohold onto the money and did not want to encourage

customers to shop around and potentially move their

money elsewhere.

If you are currently receiving a private

pension from an annuity provider and you

weren't offered the opportunity to look at

the market when you retired you should

speak to us now and we will look into your

case for you.

In addition if you smoke or have a whole of range of

medical conditions you could be entitled to a largerannuity. Many people were not aware of this and

advisors failed to ask the right questions and so they

settled for a lower figure than they were entitled to.

The consequence of this is that 1 in 4 pensioners

could be entitled to a larger pension! The

Minister of State for Pensions Ros Altman estimates

that the compensation due for this scandal could be as

much as 8.5billion!

There are lots of other areas of concern with annuities

as well, in particular covering widows/ers pensions

where customers are not aware that upon death thepension stops or significantly reduces for their next of

kin. Was this explained properly to you or your partner

at the time if not again you may be due compensation?

As discussed earlier these are very complicated

products but also play a crucial part of peoples financial

well being in retirement. It is a scandal if a singlecustomer has ended up getting a pension of less than

they should have because of poor advice or poor

information. If the documentation you were sent was

unclear and didn't set out the options properly it is

worth getting it checked.

"The compensation bill for

pensioners could be as much as

8.4billion"


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Pension Transfer Mis-selling

A pension Transfer is where you move a pot of money or accrued benefit from one pensionscheme to another.

Ever since this was first allowed it has been riddled with controversy and open to abuse by theFinancial Services industry.

Largely this has been driven by financial incentives that encouraged advisors to recommend atransfer even if its not in the best interests of the consumer.


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Do You Fall into any of these

categories?

If you moved any type of Defined

Benefit scheme into a Money

Purchase or Personal Pension

scheme.

Defined Benefit scheme or Final Salary scheme iswhere you are guaranteed a certain amount of pensionat your retirement normally expressed as a percentageof your final salary.

Money Purchase scheme or Personal Pension schemeis where the amount of Pension you receive is basedupon the investment performance of the fund and theannuity rate you can get when you retire.

The reason why this area is so controversial is thatyou are swapping something that is guaranteed forsomething that is not!

Financial Advisors often took big commissions andthen left you with a much smaller pension than youwould have got if you had stayed where you were. Ifyou are in this category you should give us a call and

we can check it for you.

If you were in one of the Public

Sector schemes and you were

either advised not to join or to take

out a Personal Pension instead.

Nearly all of the Public Sector pensions are reallygood and its virtually impossible to get anythingbetter in the private sector.

If you were advised not to join one of theseschemes it should set off alarms and you shouldcheck into the advice you were given.

If you were in a Final Salary/

Defined Benefit scheme and you

were advised to take out a Free

Standing AVC (FSAVC) rather than

an AVC.

A FSAVC is like a Personal Pension that sitsalongside a Final Salary Scheme an AVC is whereyou make additional contributions to the scheme

itself to enhance your benefits.

Not all schemes allow AVC's and where they dosometimes the benefits you buy are poor. However,in a lot of circumstances the best thing to do wasto pay into the AVC as it enhanced yourguaranteed pension. There are lots of reasons whyan advisor might advise a customer to take out aFSAVC some good and some bad but it is worthchecking into this if you have bought one.


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How to avoid being Mis-sold

There are a few golden rules that will reduce the likelihood of you being mis-sold in the first place.

1) Be sure to understand what the charges are for the plan and what you get forthose charges.

The industry is much better today at providing clarification on exactly what you will be charged but itsessential that you fully understand this before entering into any contract. This sounds obvious but veryoften Financial Services products can be complicated and often include a combination of upfront andongoing charges.

2) Financial Services companies are renowned for overly complicated paperwork and

lots of it.

I know its a chore but go through this paper work and underline anything you don't fully understand andget them to explain it to you. Any company worth dealing with should have no problem with this at all.

3) Understand clearly in your own mind what you are trying to achieve with yourpension or investment plan and also be honest with yourself about the level of risk you areprepared to take. Before speaking to an advisor or company have this written down and be clear aboutyour objectives.

Your ambitions may not always be achievable and the company or advisor should be able to explain why

that is the case and if there is anything further you could do to improve your position. Again this issomething any good company or advisor would take you through anyway but its best to have given thissome thought in advance of that meeting.

4) Financial Products are often some of the most important purchases you will make.

Make sure you understand what your alternatives are and the what the strengthsand weaknesses of each potential company are.

5) If you are getting independent advice then see advice as a product.

Yes you need to trust and get on with your advisor but also it is worth speaking to more than onepotential advice firm before deciding who to go with and also to get an understanding of different feestructures.


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Pension Investment Mis-selling

Most private Pensions are ultimately just another type ofinvestment vehicle.

The money you put into it will grow or fall dependantupon the investment performance of the fund/funds youare invested in.

The trouble with Investments is that they are extremelycomplicated! Even if the advisor you saw meant well anddid the best job they could, if that has a left you in aninappropriate investment you should get it sorted.

Advisors need to offer "clear, fair and not misleading

advice". Even if you felt like it was your decision if theseprinciples were not followed you may well be entitled tocompensation.

"Advisors need to offer clear, fair

and not misleading advice"


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For instance:

1)The charging structure- Was this fair and properly explained?

2)The risk within the fund- is the risk profile of the fund right for you and yourcircumstances?

This is key as many thousands of consumers have ended up in funds that are much higher risk than theywould have felt comfortable with if they had truly understood what they were signing up for.

Back to our car analogy- Did the advisor properly explain what was going on under thebonnet and even if they did is it reasonable that you would have understood whatthat really meant?

It's important to realise this is not something to be ashamed of , as we are often talking about highlycomplicated investment structures that many advisors struggle to properly understand.

All investments carry an element of risk, the question is did you fully understand the risk you were takingon and if not you should get your situation checked out?

3)What has been the ongoing support from the advisor?

Hopefully your advisor if you have one is very attentive and keeping your position up to date, if not, arethey taking a fee for a service they are not providing?

Are you left you in a fund portfolio thats needs management with no way of managing it realisticallyyourself?

People naturally feel like its their decision making that has been wrong and sometimes this may be truebut most often it is not. Its is the responsibility of the company or person that sells you the product tomake everything clear and easy to understand.

If you have ended up in a poor investment vehicle because they have not explained things properly orgiven you all of the information you need they need to put it right.


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What to do if you think you have an issue?


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Do you think you may have been mis-sold?

If you think you have been mis-sold then there are two routes to potential compensation/ redress. Youcan do this yourself or use the support of a specialist Claims Management company such as MyChampion.

The advantage of doing it yourself is that it will not cost you anything.

The disadvantage is you will have to do it yourself! Our advice would be that this decision depends uponyour confidence in the issue and also what level of time you are able to commit to the process.

Using a claims management company will cost you although with My Champion there is no cost unless youget a successful claim.

Pensions and Investment mis-selling cases are often very complex issues and using a service such as My

Champion can increase your chances of success, greatly reduce the work load andoften lead to significantly higher compensationas our experts can fight it out with theirActuaries on your behalf.

We are able to refer to previous cases and the Financial Services Companies know that when you haveMy Champion involved there is no point in them mucking you about, as we will not give up or settle foranything less than what you deserve.

If you want to do this yourself then the first port of call is to approach the company that you believe mayhave mis-sold you the plan. Set out clearly what it is you believe they have done wrong and ask them toinvestigate the matter for you. If the response you get does not meet your expectations you canpotentially raise the matter with the financial services ombudsman. The key in dealing with theOmbudsman is to demonstrate that you have exhausted your avenues of discussion with the provider andthat their response is unsatisfactory.

-Make sure you keep copies of all correspondence-Make notes of each call; time, date, what was discussed and who with-Provide as much supporting evidence as you can-If they make you an offer (generally) don't accept the first offer they make- Understand the loss you havehad to guide you on this.

The alternative is to give My Champion a call and we will manage all of this on your behalf and alsoprovide the technical expertise to ensure that your claim is positioned correctly and supported by casestudies and technical evidence.

We promise:

- We will never contact you unless you give us the permission to do so

- We will be transparent about our charges and how we will work with you

- We will fight for you and always be on your side


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T:0800 3800 090

E:[email protected]

www.mychampion.co.uk

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