The Financial Conduct Authority has given an update on the British Steel redress scheme, telling individuals they should hear from advice firms by September 28.
In an email update, the regulator said a review of the advice received to transfer out of BSPS is underway.
When it is complete, the adviser will write to the individual if the advice was suitable or not.
“If you disagree, we can arrange for the Financial Ombudsman Service (Fos) to independently review the advice,” the FCA said.
“We will be watching firms closely to make sure they are reviewing advice properly.”
The FCA said if the advice was wrong, the adviser will calculate what the individual could be owed using the regulator’s calculator.
Other losses
The City watchdog urged consumers to let the advice firm know about any other losses they may be owed money for.
“You can do this by completing the ‘other losses’ form that your firm will send you,” it said.
These losses could include money paid to get tax advice, any tax charges or compensation for any distress and inconvenience they have suffered.
Awards for distress and inconvenience will, if eligible, vary depending on individual circumstances and will likely be modest.
Elsewhere, the Financial Services Compensation Scheme is making decisions on redress scheme cases where the adviser has failed.
“If you have a claim with FSCS, you can check its status at any time through the FSCS’s online claims portal, or by speaking to your representative if you’re using one,” the FCA said.
“FSCS publishes average claim timescales on its website each month and will contact you directly if your claim is delayed – for example if they’re waiting for information from a third party. “
Last month, the FCA published an update on its work with the BSPS and the outcomes so far.
The regulator said it had carried out around 30 investigations into firms and individuals regarding defined benefit transfer advice related to BSPS.
The FCA's evidence suggests almost half (46 per cent) of BSPS members transferred out of the scheme after receiving unsuitable advice.
The regulator said it has seen two main types of misconduct in BSPS cases.
In most cases, firms or individuals have breached the principle that they must conduct their business with “due skill, care and diligence”, the FCA explained.
This means that advisers have shown a significant lack of competence in their advice.
In more serious cases, firms or advisers have breached the principle that they must conduct their business “with integrity”.
This means that they have been reckless or dishonest in how they have dealt with consumers and/or the FCA.
The BSPS case
During 2017, BSPS members were asked to make decisions about their pensions as part of a restructure of the scheme.
About 8,000 members transferred out of the scheme, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised, leading to an intervention from the Financial Conduct Authority that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.
The debacle created a mountain of liabilities, which lawyers believe could end up costing the industry up to £300mn.
The FCA announced last year that it plans to deliver £71.2mn in compensation to former members of the scheme who received unsuitable advice.
The scheme covers those who transferred out between May 26, 2016 and March 29, 2018.
However, in February this year a number of steelworkers wrote to the FCA expressing concerns about the regulator’s calculations for the scheme.
sonia.rach@ft.com
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