The Financial Conduct Authority (FCA) declined to answer specific questions about the British Steel Pension Scheme (BSPS) at a seminar with advisers in Swansea yesterday (21 November), as workers try to decide on their financial future.
Last week, while speaking at a Work and Pensions Committee hearing at the Parliament, Christopher Woolard, FCA’s director of strategy and competition, revealed that the regulator has an ongoing programme of "visiting advisers in the Swansea area and Port Talbot area, reminding them that there are requirements” when advising clients to transfer their pension pots.
Pensions expert and founder of Pension Playpen Henry Tapper, who has visited Port Talbot to speak to the British Steel pension scheme members, said there is little evidence of financial advisers who have met with the steelworkers suggesting anything other than transfers to them.
Around 130,000 steelworkers will have to choose to move their defined benefit (DB) pension pots to a new plan being created, BSPS II, or stay in the current fund, which will be moved to the Pension Protection Fund (PPF).
From these, around 43,000 are deferred members, which means that transferring out their pension is also an option for them.
More than 7,000 members of the scheme have requested a transfer value quotation between April and September this year, with more than 700 requests totalling more than £200m being concluded or processed during that period.
According to Steve Carlson, chartered financial planner at Cardiff-based Carlson Wealth Management who attended one of the two seminars attended by the FCA yesterday, a mention to the British Steel scheme was made “very briefly”.
He said: “[The FCA] said they were not going to go into any scheme specifics today, which they didn't, and questions at the end which were scheme specific they refused to answer.”
Instead, the regulator revised previous communications issued this year, such as a note published in January setting out its expectations on DB transfers, and data on suitability of these transfers published last October.
Mr Carlson said: “The regulator said that a lot of firms are doing DB advice on a generalist basis, haven't being personalising it [the advice] to the client, they have been doing it on a commodity-type basis - as quickly and cheap as possible - and that they think that kind of advice process is leading to bad advice.”
The FCA also addressed “a couple of other points about firms having the adequate resources to deal with the volume of work, to deal with introducers, that advisers need to do due diligence on them,” he added.
The FCA regulates financial advisers, while the BSPS and other pension schemes are under the remit of The Pensions Regulator (TPR).
A FCA spokesperson declined to comment on this matter.
Last month, on its update on DB transfers, the FCA said that it will “continue to monitor this market and, where appropriate, to assess firms who provide advice on DB transfers”.
It said: “We intend to carry out a further phase of supervisory assessments starting in the current business year.”