My IFA Friend and Pension Mis-Selling: What You Need to Know
TL;DR – Quick Summary
If your Independent Financial Advisor (IFA) recommended a pension transfer—especially into a SIPP—and you’ve since experienced poor returns or high fees, you may have been the victim of pension mis-selling. Many UK savers are eligible for compensation through mis sold pension claims, often with help from no win no fee pension solicitors. Book a free consultation now to find out if you can claim.
How Pension Mis-Selling Happens—Even Through Trusted Advisors
Many pension mis-selling stories begin with trust. Perhaps it was a friend, a recommended IFA, or someone with years in the industry. Yet even trusted advisors have led clients into unsuitable pension products for commission or due to poor guidance. If this sounds familiar, you may have grounds for a pension claim.
Common examples of pension mis selling include:
- Transferring from a defined benefit (final salary) scheme without proper justification
- Recommending SIPPs invested in high-risk or unregulated assets
- Failing to explain potential long-term consequences or fees
Final Salary Pension Transfers – Rarely the Right Move
Transferring from a final salary pension, which provides a guaranteed income for life, is rarely in a client’s best interest. Yet thousands were advised to do just that—particularly during the early 2010s, when commissions and deregulated advice led to an explosion of poor pension guidance.
Warning signs of a mis sold final salary transfer:
- You were promised higher returns without mention of risk
- You lost valuable benefits like inflation protection and spousal pension
- You weren’t told how high ongoing management fees would be
Pension transfer compensation is available—but time limits apply. Act quickly to preserve your rights.
Mis Sold SIPPs: How They Trap Savers
Self-Invested Personal Pensions (SIPPs) offer flexibility—but that comes with risk. Many IFAs sold SIPPs as low-risk or “exciting opportunities” while hiding fees and the true nature of the underlying investments. If your SIPP contains overseas property, storage pods, or carbon credits, you may have a strong mis sold SIPP pension case.
Typical red flags include:
- No risk assessment or fact-find carried out
- Investments labeled as “low risk” that later collapsed
- Hidden commission structures that benefited the advisor more than you
“Many clients weren’t told their SIPPs locked them into illiquid, high-charge schemes—now they’re fighting to recover losses,” says pension claims expert John Carter.
How Pension Scams Start: Know the Tactics
While some mis-selling stems from poor advice, others are outright pension scams in disguise. These often begin with cold calls, social media ads, or so-called free pension reviews. Many mimic government or HMRC branding to appear credible.
Watch out for these classic scam tactics:
- Unsolicited contact offering a “free pension review”
- Promises of early pension access before age 55
- Complex offshore structures to mask performance or costs
If you were lured into a scheme that promised high returns or tax-free withdrawals, a professional claims review can help you identify mis-selling or fraud.
How to Claim Pension Mis-Selling Compensation
If you suspect you’ve been mis-sold a pension, there are two main routes for compensation:
- The Financial Ombudsman Service (FOS): Handles complaints against regulated advisors who are still trading.
- The Financial Services Compensation Scheme (FSCS): Helps clients recover losses if the advisor or firm has gone out of business.
To make a successful pension claim, you’ll typically need:
- Proof of negligent advice or a lack of proper risk warning
- Evidence of financial loss or diminished pension value
- Records of investment performance and advisor correspondence
Many claims firms offer no win no fee services, meaning you only pay if you win your case.
What’s the Average Compensation for Mis Sold Pensions?
The average compensation for mis sold pension cases ranges between £10,000 and £50,000. However, amounts can vary significantly based on the size of your pension, the level of financial harm, and the type of investment you were recommended.
Larger claims—sometimes exceeding £100,000—have been paid out for those who transferred out of high-value final salary pensions into high-risk SIPPs or scams.
No Win No Fee Pension Solicitors – A Smart Way Forward
Worried about legal fees? You’re not alone. That’s why working with no win no fee pension solicitors can be a smart option. These professionals take on the risk, only charging a fee if your case is successful. This makes expert legal support accessible to everyone, regardless of financial situation.
Real People, Real Losses – Don’t Wait to Act
Whether your IFA was a friend, a trusted local contact, or someone highly recommended, bad advice can still lead to serious damage. Don’t