The MP for Blaenau Gwent in South Wales has asked the government to come up with new criminal charges for rogue advisers, following the British Steel transfer debacle.
In a debate in the House of Commons last week (March 14), Nick Smith said members of the British Steel Pension Scheme had received poor advice, faced high adviser charges, and had seen their families’ fortunes put at risk.
He said, current enforcement measures such as de-authorising rogue advisers and fining them were not enough.
He said: "Being removed from the register and suffering financial penalties is insufficient to deter pension sharks.
"May we have a statement from the Treasury to promise new criminal charges for rogue financial advisers, so that they are properly held to account?"
Andrea Leadsom, leader of the House of Commons, agreed Mr Smith was right to raise this issue, saying "it is worrying for people to receive cold calls that seek to remove their pension rights, or encourage them to invest in non-existent assets.
"That is an appalling scamming practice," she said, suggesting Mr Smith should seek a debate in Parliament to raise his concerns directly with ministers.
FTAdviser reported on Monday (March 18) that the Financial Conduct Authority will work with financial advice firms which conduct defined benefit transfers to stamp out bad practice in the sector.
Mr Smith has previously called for the director of one of the advice firms at the centre of the British Steel debacle to be "properly held to account".
Active Wealth, which entered into liquidation in February 2018, 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.
The Financial Services Compensation Scheme has been dealing with scores of steelworkers who claim they were wrongly advised to transfer out of the pension scheme.
The FSCS agreed to pay out on behalf of clients but announced in January that BSPS members won’t receive a reduced discount rate for compensation calculations in claims relating to liquidated advice firm Active Wealth.
Alastair Rush, principal at Rutland-based IFA Echelon Wealthcare, who created Operation Chive - Counselling, Help, Information, Volunteer Exchange – to provide free counselling to steelworkers, also agreed with Mr Smith's calls for new criminal charges.
He said: "I don't think it [concerns] just the advice market, it's introducers, Sipp managers, it's the whole spectrum of the financial food chain."