Three firms have stopped giving defined benefit (DB) transfer advice after intervention from the Financial Conduct Authority (FCA), as part of the watchdog's work concerning the British Steel Pension Scheme (BSPS).
A spokesperson at the FCA declined to name the three companies.
The watchdog is also going to visit six more firms this week due to concerns about the financial advice that is being given to scheme members.
In an update published today (11 December) on its work about the case, the regulator said that it “has undertaken a significant information gathering exercise in order to identify which firms have been most active in advising consumers to transfer out of the BSPS”.
Steelworkers have until 22 December to decide whether 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).
The failed scheme has about 130,000 members of which 43,000 are deferred, which means transferring out of their pension is an option for them.
FTAdviser reported in November that several steelworkers appeared to be transferring out their pensions after being lured by cheap deals by unregulated introducer firm Celtic Wealth Management & Financial Planning, which then referred the clients to advice firm Active Wealth.
More than a hundred of complaints have already landed with the Pensions Ombudsman about the scheme.
The regulator’s work in this case “included gathering information from 50 financial advice firms, 12 (self-invested personal pension) Sipp operators, and the BSPS scheme administrators”.
It said: “Based on the data received, the FCA has visited seven advice firms and requested files from a further four advice firms.
“As a result of this work three firms have stopped advising consumers on pension transfers.”
The watchdog's next step will be to visit six more firms, whose names were not disclosed.
The FCA has also held four seminars in Swansea and Doncaster for advisers who specialise in pension transfers.
Some 151 advisers attended these seminars, in which the regulator “set out the standards it expects when pension transfer advice is given to consumers and the responsibilities firms have when dealing with unregulated introducers”.
The FCA also wrote to 148 authorised financial advisers in these locations explaining its expectations when advisers refer their clients to pension specialists.
The watchdog has been co-ordinating this work with The Pensions Regulator and The Pensions Advisory Service, which has set up a dedicated helpline for BSPS members.
Last week, the regulator reissued its alert to consumers reminding them of the risks of transferring their DB pensions to a new scheme.
The watchdog also said that it will continue its previously planned work on DB transfer advice in the wider market.
Last week, it sent out a questionnaire to 45 firms as part of the next phase of this work, it said.