The COVID-19 pandemic has caused widescale chaos across the UK. In addition to the health concerns, many are also worried about the economy, and how long it will take to recover in the aftermath of the lockdown. There’s also growing unrest among investors, who are alarmed that their pensions and other investments may be adversely impacted.
Most experts agree that it’s important not to act hastily, and that coronavirus shouldn’t have too much impact in the long term. Here’s more information.
Official advice – don’t rush into any decisions
Both the FCA and TPR advise against panicking during this time. Hasty decisions are more likely to leave investors open to scams, or making choices that harm their long-term finances.
Charlotte Jackson, MaPS’ Head of Pensions Operations and Consumer Protection, offers the following reassurance: “If you are in a workplace pension, investments are designed to deliver over the long term, with measures in place to reduce the risks faced by investors as they approach retirement.”
TPR’s Chief Executive Charles Counsell adds: “Pensions remain a safe long-term investment for your retirement and it’s important to avoid hasty decisions about cash that’s taken a lifetime to build.”
Avoiding poor advice
While it’s tempting to try to protect your money by moving it into a ‘safer’ investment product or pension, this isn’t a recommended course of action, unless you receive clear, unbiased recommendations from a financial expert.
If you’re selecting an investment product in a hurry, you’re more likely to become a victim of investment mis-selling (or a scam). Being mis-sold an investment could result in a greater loss of funds, which might be financially crippling.
If you do decide to move your money…
If you choose to change your investment product during this uncertain period, be alert to the following issues:
- Lack of clarity. Even if you’re keen to act swiftly, it’s important to take the time to understand your new investment properly. A good financial advisor will be happy to answer any questions that you might have.
- Lack of choice. In accordance with official guidelines, you should be offered a range of recommended investment products, based on your specific circumstances. If you’re not, this should set alarm bells ringing.
Signs of mis-selling
Other signs to look out for include:
- Lack of information about hidden fees. You should be told exactly what costs are involved, including any transfer fees etc.
- No risk assessment. Your financial advisor should assess your attitude to risk before recommending any investments. It doesn’t matter if this has been carried out in the past; it’s something that requires a fresh review whenever you invest in another product.
- Risk explained. The level of risk of each investment product should be explained properly. Your advisor should also highlight that risks may be higher in these volatile, uncertain times.
Making the right decision in the long run
If you’re concerned about your current investments, it’s worthwhile talking to your financial advisor or investment provider. They’ll provide you with information about the situation, and some recommended advice for the future. The Pensions Advisory Service website is also an excellent source of information if you’re worried about the impact of coronavirus on your pension.
What to do if you think you’ve been mis-sold to?
If coronavirus has had a negative impact on your investments and you discover that you’ve invested in a higher-risk product than intended, our experienced and professional team can help.
The Goodwin Barrett team are experts in this area and can help you seek compensation. If you think you’ve been mis-sold to, get in touch with us today on 0808 163 1659 or email firstname.lastname@example.org.