The Financial Services Compensation Scheme (FSCS) has explained how it will calculate the compensation to claims it has received against British Steel IFA Active Wealth.
The FSCS said it would compare the benefits that would have been available to the claimant had they transferred to the new British Steel Pension Scheme (BSPS) with the current value of their pension.
This comparison was "likely to provide the claimant with fair compensation" subject to the current requirements from the Financial Conduct Authority (FCA) compensation, the FSCS said.
The FSCS also said it has conducted a thorough examination of the claims it has received against Active Wealth and was satisfied there were claims where the conduct of the IFA firm "gives rise to a civil liability in respect of which compensation is payable".
Active Wealth entered liquidation in February after the firm was told to cease any pension transfer activity by the FCA months earlier.
It was one of 10 firms which stopped giving transfer advice after they were identified as key players advising members of the BSPS to transfer out of their defined benefit (DB) pensions.
The firm had advised as many as 300 British Steel pension clients, of which 64 proceeded to transfer out of the British Steel pension scheme into alternative pension arrangements without taking further advice.
FTAdviser reported in November that Active Wealth was working alongside unregulated introducer firm Celtic Wealth Management & Financial Planning, which referred the clients to the adviser.
The FSCS said some of the steelworkers which transferred out of the scheme received unsuitable advice "due to the nature of the accrued benefits which could have been carried forward" into the new BSPS, and "which are unlikely to be matched through the private arrangement which Active Wealth recommended".
In such cases, the FSCS considered Active Wealth breached its obligations under FCA’s Conduct of Business Sourcebook, "giving rise to a claim for breach of statutory duty".
FSCS also revealed this week (15 May) it has received, so far, 29 claims against Active Wealth.
In the meantime, a group of steelworkers in Port Talbot has instructed a solicitor firm to pursue a legal case against all parties involved in the pension transfer scandal.
maria.espadinha@ft.com
