The Government has received criticism from advisers after stating that the ban on pension cold-calling will not encompass all investment products.
After new measures were recently confirmed to prevent people being targeted by pension scams, the government drew attention to a number of responses received from advisers, who had suggested that the ban should be applied to all investment products. The main reason cited for this was the increase in scams involving fraudsters mentioning “alternative investments”.
Responding to this suggestion, the government stated that extending the cold-calling ban to all investment products would not be considered proportionate – a conclusion which has been met with mixed feedback.
Despite acknowledging its use within the industry, Simon Webster highlighted the negative impact of cold-calling within the sector. The managing director of Fact & Figures Chartered Financial Planners stated: “In general terms, all pensions mis-selling has started from a cold-call and that is widely accepted within the profession and elsewhere so that is something they need to get rid of.
“Decent professional financial advisers I speak to are too busy to employ marketing firms to do make cold calls and drum up business. It [raises] the question what kind of business is going to be promoting investments to Joe Public by telephone. I am not overly comfortable with the idea that cold-calling for this kind of business is appropriate.”
Others also highlighted that cold-calling is a popular lead generation tool, with Roy McLoughlin stating that it is simply another method used by firms to boost business.
The associate director of Cavendish Ware stated: “Whether we like it or not, because of the lack of advisers, one has to address that people will still seek out a form of advice and therefore as long as it is responsible and people are made to declare their status we have to take that different ways of communicating with the general public are acceptable.”
The government also confirmed that the ban will not be enforced against firms overseas, given that they are out of the UK’s jurisdiction. Whilst action will be taken if calls are made on behalf of a UK company, certain unregulated overseas schemes may not be affected.
Stating that this was largely appreciated, the government highlighted that many respondents had suggested carrying out an awareness campaign in order to mitigate the risk of being targeted by firms overseas.
