Pensions and investments managed by some unit-linked funds could lose savers money if consumer watchdogs do not step into protect their cash.
The Financial Conduct Authority (FCA) is satisfied that no widespread issues are affecting savers, but found some firms were not acting in the best interests of their customers after a review of the market.
Unit-linked funds are pooled investments that many big name pension and life insurance providers offer.
Around £900 billion is invested in these funds – and the majority of that money is in pensions.
This review was pre-emptive and looked at ensuring firms have arrangements to protect customer interests, “said an FCA spokesman.
We found no serious threat to customer savings or investments. We did uncover some specific problems in individual firms, which left unchecked could lead to customers being disadvantaged.”
Firms should put customers first
FCA Director of Enforcement and Financial Crime Tracey McDermott has spoken out about misselling in the financial services industry.
She was speaking out about firms they sell customers products that the customers do not seem to know they have bought.
The question was related to add-on products bundled in insurance or pensions.
“It was a good question, said McDermott. “People are paying for products they do not know they have. This goes even further in some cases, as some customers are paying to insure non-existent risks and making investments that are clearly unsuitable for them.”
She explained the FCA felt that some companies were chasing profits with no regard for their customers.
“A culture has developed in some parts of the financial services industry that considers supplying products that meet customer needs seem to be an afterthought,” she said.
Warnings about bogus advisers
The FCA has also issued two warnings about bogus firms posing as regulated financial advisers:
- William Wright (clone individual)
- Property Cash Buyers
- Rowe Corporate Services
- Northern Capital Consultants
- D G Financial Service Partner (clone firm)
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser
Find out how to report unauthorised advisers on the FCA web site
