FT Adviser (11/06/2019) – Self-invested personal pension providers are increasingly being approached by CMCs, with at times spurious attempts to get client information without the client’s knowledge.
The Financial Conduct Authority is in the process of authorising hundreds of CMCs, which will make them subject to more stringent controls and supervision.
But while most CMCs are expected to operate a genuine business model, it is those not authorised by the FCA advisers and providers should be wary of.
Greg Kingston, group communications director at Curtis Banks, told Financial Adviser the firm had received data access requests from CMCs on behalf of clients that had never even held a pension with the provider.
Curtis Banks also received requests without evidence that the client had granted the CMC permission to act on their behalf.
But the provider explained CMC requests are often templated, which makes it easier to spot mistakes.
Alan Chan, director at IFS Wealth and Pensions, said the reason for the influx in non valid claims is that such CMCs tend to operate on a no-win-no-fee basis and are looking for anything that might stick.
He said: “The customer has nothing to lose and all to gain by putting in a claim and leave it to the CMC company to fill in the blanks.
“And of course the CMC then gets a large chunk of the payout if successful. So it’s all about volume for them and sending out as many letters as possible.
“Some CMCs even go as far as abusing data protection rules by making a subject access request and then reverse engineering a complaint by reviewing the suitability reports and files and making up a false story for a claim.”
Mr Chan said: “It goes without saying that I very much welcome the fact that CMCs are now regulated by the FCA and now the FCA just needs to show some teeth and police that sector properly.”
Full article link: https://www.ftadviser.com/pensions/2019/06/11/providers-increasingly-approached-by-cmcs/
