St. James’s Place (SJP) has denied claims of ‘factory gating’ British Airways members, arguing it has “strict policies in place around marketing and the transfer of pensions”.
FTAdviser reported earlier today (21 June) that the firm has been accused of approaching scheme members during the consultation process for closing British Airways New Airways Pension Scheme (NAPS) to future accrual last year, being very active in trying to promote cash equivalent transfer values.
The accusations were made by Tim Sharp, policy officer at Trades Union Congress (TUC), based on reports from the British Airline Pilots' Association (BALPA).
A spokesperson for SJP said: "For a number of years, seminars have been hosted for BA pilots covering a number of pension-related topics – for example, issues with tapered and lifetime allowance – and focussing on the value of the BA DB schemes.
“At the seminars it is made absolutely clear that St. James’s Place does not offer independent financial advice, and these are arranged with the knowledge and agreement of all relevant parties.”
The spokesperson also argued that a “DB transfer will only be recommended where it is the right course of action for the client, taking into account their full financial circumstances and needs”.
He said: “Due to the complex nature of these transactions, every DB case is fully checked and authorised by a qualified individual before a transfer can go ahead.”
Factory gating came to light during the British Steel Pension Scheme (BSPS) transfer scandal, where promoters working on behalf of financial advice firms approach scheme members in person.
Steelworkers were given until 22 December to decide whether to move their defined benefit (DB) pension pots to a new plan being created, BSPS II, or stay in the current fund, to be moved to the lifeboat Pension Protection Fund.
The scheme has about 130,000 members of which 43,000 are deferred, meaning transferring out of their pension was 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 firm, the first one to be stripped of its transfer permissions, has now entered into liquidation.
FTAdviser reported in May that advisers who look for pension transfer business outside workplaces risk breaching the Financial Conduct Authority (FCA) rules, as more cases of the practice come to light.