FCA asks advisers about British Steel transfers

The Financial Conduct Authority has sent a survey to 2,500 advice firms on its work related to the British Steel Pension Scheme (BSPS). Advisers have been asked to complete the form regardless of whether they advised on any BSPS pension transfers. The survey asks advice firms how many BSPS clients they have advised, the value of any completed transfers and if they have received any complaints in relation to the advice they have given. It also asks the 2,500 advisers if their professional indemnity insurance will cover BSPS claims. In 2017, many British Steel workers were advised to transfer out of their defined benefit pension scheme due to its closure. Many were recommended by advisers to move their pension into a Personal Pension Plan or a Self-Invested Personal Pension. The FCA survey has been met with disappointment by many Financial Planners on social media, with many turning to Twitter to voice their frustrations. Martin Bamford, Financial Planner at Informed Choice, aired his frustration at the number of surveys the FCA has been sending advisers recently. He said: “The new FCA strategy of keeping financial advisers so busy filling in regulatory returns and surveys that they don’t have time to sell unsuitable products is genius.” The survey comes after the regulator launched a consultation on a redress scheme for BSPS victims in December. If it goes ahead the regulator would compensate 7,700 BSPS members who were encouraged to transfer their BSPS pension to a personal pension and were often poorly advised. Many of the BSPS members were targeted by financial advisers who helped them transfer their pensions, often with poor results. The cost of any redress scheme would likely run into many millions of pounds. In November the Financial Services Compensation Scheme opened its doors to compensation claims against three failed financial adviser firms who arranged pension transfers for members of the BSPS. They were the latest in a long line of failed adviser firms linked to BSPS transfers. The three firms declared in default by the FSCS were: West Wales Financial Services Ltd, AW Dallas Financial Services Ltd and Fortuna Wealth Management Ltd. West Wales Financial Services was one of 10 firms first asked to halt DB transfer work by the Financial Conduct Authority due to advice given to BSPS members. Problems occurred after British Steel decided to restructure its pension scheme with many members advised to transfer their assets from the BSPS's defined benefit scheme into a personal pension. The redress scheme would be set up under s404 of the Financial Services and Markets Act. Subject to final approval by the regulator’s board, the FCA would aim to set up a scheme next year. Consultation on the scheme will run until March. The FCA said the redress scheme would be limited to BSPS transfer advice. The watchdog says BSPS is a “highly exceptional case” with the FCA analysis revealing that 47% of the advice given was unsuitable compared to an industry average of 17% seen in typical higher-risk firms in non-BSPS cases.

FCA asks advisers about British Steel transfers

Related items

News from Twitter