Pensions are often very complex. They become even more complex when a divorce is taking place.
An article in the Daily Mirror today is reporting that a claims management firm is pursuing claims against family lawyers who did not properly value pension assets when advising on a divorce settlement.
The claims firm believes that up to half of the 1.5 million divorce cases which took place since pension sharing became an option in December 2000 may have had their settlements valued incorrectly.
As little as we like to see claims management firms taking money off consumers (the firm mentioned in the article charges 15% commission), it does raise an important issue.
When getting divorced, the right time to call in a suitably qualified and experienced independent financial adviser with pensions expertise is before the financial settlement is finalised.
Too often we receive calls from people getting divorced or their lawyers asking for our advice on the implementation of pension sharing orders. Despite their inherent complexities, it seems that there are many divorce lawyers who go it alone with it comes to pensions advice.
Engaging with an IFA before a financial settlement is agreed is the best move for all parties involved.
For the individual getting divorced, it ensures that the right pensions advice is given on day one. For the family lawyer, it reduces the risk of future claims for bad advice when pension assets were discovered to be undervalued or misunderstood.
The time to call in an IFA on divorce is at the first meeting; if your divorce lawyer has not made the call, make it yourself and help your professional advisers work together to deliver the most suitable outcome.
Photo credit: Flickr/houzvicka
