British Steel Feb 22 2023

FCA forces two IFAs to stop making misleading BSPS offers

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FCA forces two IFAs to stop making misleading BSPS offers

The Financial Conduct Authority has issued supervisory notices to two firms which made unsolicited offers to former British Steel pension scheme (BSPS) members who are likely to be part of the redress scheme.

The regulator said it formally notified Abbey Lane Financial Associates Limited and Estate Capital Financial Management Limited  to stop making these offers.

This follows on from earlier this month, when the regulator said it had identified 15 firms who are engaged in the misconduct - most of which it said are associated with the British Steel Action Group (BSAG).

The FCA said Abbey Lane made offers of £100 to 82 per cent of its clients who were BSPS members and Estate Capital made offers of £300 to 83 per cent of its former BSPS members. 

“We are concerned that these offers are significantly misaligned with the average calculated redress of £45,000 for former BSPS members who received unsuitable pension transfer advice,” the City watchdog said.

“The firms will be required to apply the redress scheme to consumers who have accepted these offers in the same way they must for consumers who have not accepted offers.” 

Due to these concerns, the FCA said it warned the firms it saw doing this that they should:

  • withdraw any existing settlement offers currently pending any consumer agreement
  • treat any pending settlement offers as withdrawn
  • cease making any further offers to former BSPS members who have not made complaints

“We will not tolerate this behaviour and we will take further firm action to put a stop to this sharp practice as needed,” it said. 

Under the scheme firms will have to review the advice they gave and pay redress to those who lost money because of unsuitable advice. 

The redress scheme, announced last March, has estimated that 1,400 steelworkers will receive £71.2mn in redress under the scheme.

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