Pensions  

Firms forced to stop British Steel pension work named

Firms forced to stop British Steel pension work named

The Financial Conduct Authority (FCA) has revealed the names of the advice firms it has asked to stop carrying out defined benefit (DB) transfers for British Steel pension scheme members after concerns were raised about the suitability of the advice they received.

Megan Butler, the Financial Conduct Authority’s (FCA) head of supervision, was asked by the work and pensions committee for the names of four firms the regulator had taken action against in respect of DB advice given to British Steel workers.

But to the MPs’ dismay she could not produce the names as she did not know them.

After asking her staff in the room to produce them during the proceedings, she revealed three names: Active Wealth, Pembrokeshire Mortgage Centre and Mansion Park.

But she could not produce the fourth name.

She said: “Before any restriction on a register goes through due process has to be followed. There is one [firm] that is in that process.”

Port Talbot's Tata steelworks is one of biggest in the world, and currently employs an estimated 10 per cent of the town's population.

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.

Steelworkers have until 22 December to decide whether to move their 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).

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.

On Monday (11 December), the FCA announced it stopped three firms giving DB pension advice as part of its work on the British Steel Pension Scheme.

The watchdog also said it will be visiting six more firms this week as part of the investigations.

Chair of the committee Frank Field said it was “alarming” Ms Butler did not know the names in the first place and could then not produce the fourth one found to have engaged in the transfer advice.

He said:  "Megan I am really shocked you don't know the names of those four firms.

"You are director of supervision and you don't know the names of the four firms who are ripping people off. This is pretty 'weird'."

She had proposed she would reveal them in a letter to Mr Field after the hearing.

But she refused to reveal the names of the firms still under investigation, saying she can’t comment on firms where there is ongoing work done on them.

The MPs also criticised the FCA for not having a proper action plan on the British Steel tragedy.

Ms Butler said it had been doing work on advisers, the community it regulates, and had attended seminars.

But Mr Field said: "Never mind the seminars, what have you been doing to catch the crooks."