A continuing theme in the mis-selling of pensions is that of transferring old company scheme retirement pots into Self-Invested Personal Pension Plans (SIPPs)

Although cold calling has been banned, I continue to be contacted by people that had a call out of the blue from an independent financial adviser, asking about old pension scheme benefits.

They tend to offer “free” financial reviews but all with the intention of persuading people to transfer those old scheme benefits into one of their own firms SIPPs. The reason? Such transfers tend to generate large commission payments.

And to add insult to injury, people are further persuaded to invest in some unusual types of assets: storage units; property developments overseas; forestry; car parks. The list is extensive.

What most of these “investments” have in common is that unscrupulous advisers also own or control the assets that are being bought. So, an adviser will receive commission for giving the initial advice to transfer; secondly, he will receive another commission for investing his client’s money in a property development he also has a stake in. In effect, his clients pension money helps to fund a property development from which the IFA benefits (but not his client) when it is sold at completion.

To avoid such situations arising, look out for the following:

1. Never follow advice from an adviser that has “cold called” you.

2. If an adviser promises investment returns that seem to be too good to be true, then they probably are. Have no further dealings with such people.

3. Never make a decision to invest on your own or without double checking with someone else if you are not a sophisticated investor yourself.

4. Advisers have complex and detailed rules to follow when making a sale. If you are being asked to sign documents at the first meeting, committing yourself to an investment, then that’s unlawful.

5. The best advice you can follow is only invest in something you understand. It is better to invest in something boring like a Building Society account if you are only comfortable with that. Too many people end up losing money because they’ve been persuaded to invest in something they did not fully understand.

This is not an exhaustive list, but will hopefully give you some indication of things to be wary of when speaking to a financial adviser. Most are well trained these days and ethical. Sadly, some are not. Make sure you don’t fall for the latter.