Turbulence and uncertainty in the markets over recent months has led many individuals to consider withdrawing their investments out of fear. Although we know this isn’t necessarily the right thing to do, it is the reality of the current systemic shock which we find ourselves in. The unfortunate consequence of this, however, is there could be more cash lying around. Individuals may be willing to invest this cash in financial instruments which they believe will provide them with a good return, perhaps promising ‘guaranteed’ growth or ‘security’, which might not be there in reality.
All these factors culminate into a melting pot of problems. Now, more than ever clients will be vulnerable to scams and financial fraud. At IPS, we believe this is an opportunity for Financial advisers to reach out to their clients and educate them about the risks of financial scams. It is important to not succumb to the fear of temporary downturns in investments in this period of economic uncertainty.
Thankfully the FCA has already started an awareness campaign to highlight the surge in coronavirus related scams. The TPR, FCA and MAPS are warning people not to make rash decisions with their pensions and other investments. Now is the time for investors to remain particularly attentive to the ongoing market volatility but ultimately to understand the importance of not crystallising their losses.
The sorts of scams that we can expect to see include;
- Pensions – early access, free pension reviews
- Investments – fake crypto currencies,
- Charity Scams – A surge in fake COVID related charities asking for donations
Further information on scam warning signs can be found on the FCA’s Scam Smart website: