- If you are in desperate need of cash, explore all other ways of raising it.
Did you know, for instance, that the majority of endowment plan providers will lend you some of your endowment fund prior to its maturity? This is perfectly legal and can be relatively cheap.
- Always ask yourself, if this is such a good investment then why is this person still trying to sell it to me? Why have they not saved all the great opportunities for themselves? Why are they not sunning themselves on a beach in Barbados?
- Do not let the cash incentive tail wag the investment dog.
The legality of pension reciprocation plans is questionable - the taxman will not forget his 55% share.
- Do not deal with anyone who is not a registered independent financial adviser in the UK, as you will be ineligible for the UK Financial Services Compensation Scheme if things go wrong.
Advisers selling alternative investments tend to be tied agents who are not subject to the same rigorous knowledge and 'Know Your Customer' FSA requirements.