Is the decision to transfer your pension something driven by you or were you cold called or did you see an advert for a pension review? Pension transfers can be lucrative business and some unscrupulous companies have been contacting people with a view to persuading them to unlock their pension money. The regulator has issued guidance warning that “Pension review scams contact people unexpectedly, offering a free pension review. Investors are often called out of the blue, but contact can also come by email, post, word of mouth or at a seminar or exhibition.  As they’re promoted as long-term pension investments, it could be several years before you realise something is wrong. Most decent financial advisers would not deliberately court this type of work.

Transferring money from a final salary pension is a big financial decision. It is usually irreversible and can cause extreme hardship in a person’s old age.  It is hard to imagine a financial adviser agreeing to do it without wanting to meet you personally to discuss the complex nature of the decision and your personal views, circumstances, needs, objectives and fears.

Again the FCA has released guidance warning advisers that it expects all advisers to consider the assets in which the client’s funds will be invested. It is not sufficient for an adviser to simply advise you to transfer into a SIPP, for example, advisers must provide advice on where the pension money will be invested within the SIPP and the likely returns.  An adviser should not use generic assumptions for hypothetical investments.

Yes, we will all be concerned about leaving the benefit of the pension to our loved ones. We might also be concerned about the financial ability of the employer to pay our pension until our death and, of course, most of us are keen to retire sooner rather than later, but at what cost?

These are not necessarily good reasons to transfer out of a final salary pension. The discussions with your adviser over these concerns should include how life assurance could provide a death benefit to your family, the role of the Pension Protection Fund and the long term cost of early retirement.

Whilst this is not a sure sign that things are not right, and many people could not afford the advice without contingent charging, your adviser ought to be discussing this with you in detail and explaining the conflict of interest inherent in this method of charging.