Defined Benefit  

FCA probed 109 firms about British Steel transfers

FCA probed 109 firms about British Steel transfers

The Financial Conduct Authority (FCA) contacted 109 firms conducting British Steel Pensions Scheme (BSPS) pension transfers, and asked 66 of these for more information, the regulator revealed.

The watchdog published these figures to show that it has taken appropriate action in this matter, rebutting accusations from the Work & Pensions select committee.

Frank Field, chairman of the committee, said on Friday (12 January) that the regulator's action on BSPS has been "grossly inadequate".

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He said: "The FSA was reformed and renamed amid concerns that it was too close to the financial businesses it was supposed to regulate.

“From their intervention in this affair it seems clear that the FCA's actions still effectively protect these businesses' ability to make money out of pension funds, rather than protecting pension savers.

"They must take care they are not sleepwalking into yet another huge mis-selling scandal."

The regulator said that its "work on BSPS in particular has been thorough and includes meetings with local advisers, BSPS members, firm visits and reviewing client files."

The regulator added: "To date, the FCA has held meetings in Swansea and Doncaster for advisers who specialise in pension transfer advice which 151 advisers attended."

Steelworkers had 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).

The 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.

The Work & Pensions select committee, which held hearings with steelworkers, financial advisers and regulators amid concerns about the financial advice being given to the members, will publish a specific report on this case early this year.

Following FCA intervention, eight firms have decided to stop providing advice on pension transfers.

However, the watchdog had been following Active Wealth's work since August 2016, managing director Darren Reynolds revealed in a letter to the committee.

The regulator requested several information from the company, including specific client files and an outline of the firm's advice and sales procedures.

The FCA visited Active Wealth last July and after that the firm confirmed it would not recommend any non-standard assets to its clients.

The firm voluntarily suspended undertaking DB transfers in December, following a visit from the FCA.

In the meantime, the regulator revealed that will be collecting data from all financial advice firms which hold pension transfer permissions during this year.