The sentencing of two former financial advisers, Mark Kelly and Rikki Nicholls, to six years imprisonment for conspiracy to defraud and money laundering highlights the need for trustees to take steps to protect their pension scheme members from fraud, RSM UK has warned.
Since the new transfer regulations for providers to ‘flag’ pension transfers that could be scams were introduced last November, pensions trustees have had increased responsibility to identify and prevent pensioners losing their funds to fraudulent investments.
In this recent case Kelly and Nicholls were sentenced to six years in prison after convincing over 250 savers to transfer more than £20m of their pensions savings into “wholly unsuitable” investments.
Kelly and Nicholls persuaded a number of victims, predominantly Equitable Life customers, which Nicholls was a former employee of, to transfer their pension into accounts controlled by Kelly.
Affected members’ losses ranged from £10,000 to £200,000, and in some cases, their entire pensions savings were lost.
RSM UK pensions audit director, Elizabeth Storey, commented: “This is a stark reminder that fraudsters will seek to target vulnerable pension scheme members, particularly now, as the cost-of-living rises.
“Some people may see moving their pension funds to somewhere more accessible as an easy solution to their money woes, making them more susceptible to scams.
“The new transfer process requirements that took effect from November…
