Davies, whose firm specialises in providing advice to British expats emigrating to Australia, revealed that he has been consulting with the regulator over concerns that clients transfering pension savings into recognised overseas pension transfers (Rops) may be susceptible to investment scams.
“We, along with others in the overseas pensions industry, have been consulting with the FCA as they are trying to establish what they can and can’t do in terms of consumer protection.
“The regulator is trying to ensure that savers have the same level of consumer protection moving their UK pensions into an overseas scheme as they would when moving it to another UK scheme such as a self-invested personal pension scheme (Sipps),” he said exclusively to International Adviser.
‘Ongoing supervision’
When the FCA was contacted for comment, a spokesperson admitted that the regulator had found a “small number of firms” were advising people to make “overseas pensions transfers into unsuitable investments” but declined to disclose the identities of such firms.
She added that the FCA was looking at overseas pensions as part of “ongoing supervision of pension transfers”
Warning shot
Last week, the FCA issued a stark warning to firms advising on domestic and international pension transfers after reports that some clients are being scammed or their funds transferred into unsuitable investments.
The UK regulator said: “We are aware that some firms have been advising on pension transfers or switches without considering the assets in which their client’s funds will be invested.
“We are concerned that consumers receiving this advice are at risk of transferring into unsuitable investments or, worse, being scammed.”
Last month, the UK government also announced a ban on pension cold-calling as part of a wider crackdown on pension scams.
The measures include giving greater powers to existing pension providers to block suspicious transfers to a personal pension scheme, including Rops and Sipps.
Increased complaints
Davies admitted that “it’s possible that over time, the UK has seen more complaints about overseas pension transfers go through the [UK] Ombudsman”, prompting the watchdog to “tighten regulation”.
David White, partner of Isle of Man-based the Qrops Bureau, an independent consultancy on international pensions, said the pension transfers are under FCA scrutiny following the introduction of pensions freedoms in April 2015, allowing people to withdraw all their pension savings.
