FH Manning_Not all paths lead to Gold blog image

Not all paths lead to Gold…

I know that times are tough right now. With the advent of the COVID-19 pandemic, many of us have been forced to tighten our belts and monitor our investments more closely. Stocks have been on a turbulent ride these past few months, and the cost of basic goods and services has gone through the roof. While you might be feeling added pressure to compensate for your losses, my advice is to slow down and make wise choices. Acting hastily opens you up to potential scams and poor advice. That’s why it’s important to have a chartered financial planner or (at the very least) a ‘ regulated’ financial adviser in your corner to help point your compass in the right direction.

Spotting Common Types of Fraud

Recently there has been an onslaught of financial scams sweeping the country. Some are derivations of classic scams, others are brand new. The sudden resurgence seems to stem from the nation’s frustration with the pandemic.

Some of the more common scams include AI investment opportunities and Bitcoin scams. AI investment scams use technology to mimic real-life people in order to convince them to move money from secure accounts into fake opportunities that promise unrealistic yields. Some bitcoin scams, on the other hand, are using COVID-19 to hoax people. According to Cointelegraph, these sophisticated and opportunistic scams present a fraudulent offer –

“ Fraudsters purporting to be from a World Health Research Group claim to provide the victim with a list of active infections in their area but to access the information the victim needs to either click on a link directing them to a ‘ credential stealing page’ or make a payment in to a Bitcoin Account.”

Not every scam is predicated on purely fraudulent behaviour, however. Issues with equity and pensions have recently emerged as a result of poor financial advice on the part of unqualified, and unregulated financial planners. These situations are of greater concern than any outright scam as the role of a regulated financial adviser is that of fostering trust.

In the case of pension holders, a number of non-regulated advisers with a low moral code directed clients to transfer their gold-plated defined benefit pensions, which serve as a steady and reliable stream of income, into high-risk foreign investments without adequately disclosing the level of risk. Too often this results in a devastating loss to the pension holder due to poor advice.

In the case of equity, the issue was less of a scam and more fault on the part of unregulated companies who failed to do their diligence in educating equity holders about the weight of their financial decisions, leaving them without so much as a cursory understanding of how equity withdrawal works. This resulted in equity holders being steered toward bad decisions due to unqualified advice.

The Value of a Chartered Financial Planner

It’s one thing to fall for a random, anonymous scam. It’s another thing to lose money based on poor advice. That’s why it’s important to seek out an adviser who is regulated.
There are 23,000 regulated financial planners in the UK alone. That means there are 23,000 financial planners with a varying level of skill, knowledge, and experience.

Of those 23,000 regulated professionals, there are only 700 chartered financial planners currently operating in the UK. That’s because a chartered planner represents the pinnacle of the profession; only those with the broadest knowledge base and most stringent work ethic even pursue the honour.

In order to become a chartered professional, the financial planner must pass 14 different exams focusing on a wide range of topics from across the industry. Those who put the time and effort in are granted the title and honour from the Chartered Insurance Institute. That title in turn demonstrates to potential clients the professional’s skill level, and knowledge.

Helping You Prevent Fraudulent Activity

There are various levels of regulation in the world of financial planning. It is important to find an individual with credentials who will point you in the right financial direction and provide you with appropriate resources. I am proud to call myself a Chartered Financial

Planner, and have the skill and compassion to help you if you have even the slightest concern that someone has tried to infringe on your financial stability. The professionals at FH Manning support the use of the Financial Conduct authority’s Scamsmart tool to check the validity of any potentially fraudulent situation. If you’ve encountered any suspicious financial activities or requests not described above, feel free to contact me via email Claire at clm@fhmanning.co.uk or call the office on 01507 527383.

One final comment I’d like to make is that the vast majority of professional people working in the Financial Services sector conduct their business to an exceptionally high moral code and their main goal is to help as many people as possible have financial freedom to live the life they deserve.