Defined Benefit  

War of words erupts between steelworkers' pension advisers

War of words erupts between steelworkers' pension advisers

Financial advisers which offered free counselling to members of the British Steel Pension Scheme (BSPS) have been branded scaremongerers by two pension transfer firms.

Darren Reynolds, director of Active Wealth, and Clive Howells, managing director of Celtic Wealth Management, did not turn up on Wednesday (13 December) to a work and pensions select committee hearing on the British Steel Pension Scheme.

In a letter sent to Labour MP Frank Field, chairman of committee, both Mr Reynolds and Mr Howells gave their reasons for missing the hearing, in part due to these alleged attacks.

Mr Howells said: "The team of 'scaremongers' have travelled to various parts of the country causing unnecessary fear amongst steelworkers.

"Their tactics have been through fear and uncertainty attempt to be-friend steelworkers. Following this they will hold financial surgeries (Operation CHIVE) with the view of obtaining these clients for themselves."

Al Rush, principal at Rutland-based Echelon Wealthcare, was the organiser of these free guidance sessions in Port Talbot, and was referred to several times in the letter from Mr Reynolds and Mr Howells.

He told FTAdviser: “To imply that CHIVE was an exercise in scaremongering and new-client capture shows how out of touch they both are, their letters are a confection that goes against everything I have seen in Port Talbot. 

"CHIVE was, and remains, a signal of good intent that burns brightly only because so many decent minded and horrified financial services professionals have been appalled at the tactics uncovered in South Wales, not despite 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.

Several sources have said Celtic has been present at several roadshows from the scheme trustees, which are attended by members wanting more clarifications about their pensions and proposing to them a flat fee of £1,500 to arrange their DB transfers.

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), by 22 December.

Of the total members, 43,000 are deferred, which means that transferring out their pension is also an option for them.

Mr Howells also revealed to Mr Field that Celtic Wealth didn't give out chicken in a basket meals to steelworkers, as claimed by shadow pensions minister and Labour MP for Stockton North Alex Cunningham.

Mr Howells said: "A few meetings were arranged in a local public house when a large plate of chips and sausages was supplied. Never chicken and chips.

"However, we are aware that another IFA firm held such meetings and they may have extended the budget to chicken and chips."

In a separate letter, Mr Reynolds justified his absence from the hearing due to the impact on his clients.