1 risks
1.1 regulatory risk
1.2 risk of default
1.3 skill , credibility of providers
risks
like form of investment, plf not without risk.
regulatory risk
ensuring process compliant relevant financial , taxation regulations important , complex consideration. seeking implement plf programme can reduce risk of failure comply regulations engaging services of suitably experienced , qualified financial professionals set plf arrangement.
the legislation governing self-investment of accrued pension funds complicated. of current rules , regulations came effect on 6 april 2006, although there have been amendments , developments since time.
the sanctions imposed in event of non-compliance and/or misconduct (whether due oversight or malpractice) can severe. working financial conduct authority (fca)-regulated advisers , pension administrators ensure majesty’s revenue , customs (hmrc) scheme registration criteria met is, therefore, recommended.
risk of default
using of accrued pension benefits of individual (or group) fund single trading entity relatively high-risk undertaking. why pension funds placed in spread of investments minimise risk of loss. risk comes degree of exposure market vagaries , trading (mis)fortunes. possible mitigate risk of default extent , provision of security or collateral typical characteristic of plf transactions. pension funds can still detrimentally affected. in event of default, hmrc sanction charges can applied if default process has not been administered correctly.
skill , credibility of providers
levels of experience , specific expertise vary within finance industry. looking engage in plf programme should encouraged research options thoroughly, giving equal attention assessing credibility of practitioners.
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