Have you ever wondered who’s really profiting from your pension?
Behind the glossy brochures and reassuring conversations, a darker truth may be hiding in plain sight: secret commissions—undisclosed payments from your retirement savings to financial intermediaries—are still happening. And in many cases, these payments are made without your knowledge or consent.
🕵️♂️ What Are Secret Commissions?
A secret commission refers to a payment made to a financial adviser or associated entity without the informed consent of the client. In the context of pensions, this typically involves a portion of the member’s investment portfolio being quietly siphoned off to pay introducers, advisers, or offshore firms, hidden within the complex layers of pension structures.
These payments:
- Often aren’t disclosed in policy documents or annual statements.
- Are deducted from your funds, reducing your retirement pot.
- May breach regulations around transparency, inducements, and client best interest.
🧩 How Does It Work?
Here’s a simplified example:
- A pension holder transfers their pot into a QROPS (Qualifying Recognised Overseas Pension Scheme), often based in a low-transparency jurisdiction.
- The funds are then invested via offshore life insurance wrappers provided by firms in places like the Isle of Man.
- Inside the wrapper, assets are allocated to various funds—typically under management by known providers.
- From these funds, undisclosed commissions are paid directly into bank accounts linked to advisers or intermediaries who arranged the structure.
- The pension holder never sees this, and no explicit fee is shown.
🌐 A Cross-Border Maze
These arrangements are often constructed across multiple jurisdictions—Malta, the Isle of Man, and the UK being key players. Each jurisdiction claims regulatory oversight, yet the gaps between them create the perfect storm for wrongdoing:
- Regulators point fingers at each other.
- Auditors fail to flag risks.
- Victims are told to litigate in foreign courts they can’t afford.
Meanwhile, the flow of commissions continues—silently and legally ambiguous.
⚖️ Why It’s a Problem
- Breach of Trust: Most people believe their adviser works in their best interest. Hidden payments undermine that relationship.
- Erosion of Wealth: Over time, even modest commissions significantly reduce retirement outcomes.
- Lack of Enforcement: Despite clear evidence in some cases, regulators have failed to act, citing jurisdictional complexity or lack of mandate.
- Legal Loopholes: The current system enables advisers to create elaborate structures that extract value while leaving consumers exposed.
📣 What Needs to Change?
- Full Transparency: Every pound leaving a pensioner’s pot must be disclosed, explained, and consented to.
- Cross-Border Accountability: Regulators must collaborate, not defer, when crimes cross jurisdictions.
- Tighter Audits: Auditors must face real consequences when they sign off on misleading accounts.
- Consumer Empowerment: Clients must be empowered to ask questions—and get real answers.
🛡️ How You Can Protect Yourself
- Ask your adviser: “Do you or your firm receive any commissions or benefits I don’t see?”
- Demand clear, written disclosure of all fees and charges.
- Check if your pension is held in offshore jurisdictions and ask why.
- Use tools and services that prioritise financial education and empowerment, not sales.
🔚 Final Thought
The financial system is meant to serve savers—not siphon from them. Secret commissions are a relic of a broken model that prioritises profit over people. It’s time to demand transparency, restore trust, and ensure every pound of your pension works for you—not for someone else behind closed doors.
Your Money or Your Life
Unmask the highway robbers – Enjoy wealth in every area of your life!
By Steve Conley. Available on Amazon. Visit www.steve.conley.co.uk to find out more.
Academy of Life Planning 