The Financial Conduct Authority is expected to be making individual assessments of firms significantly involved in providing defined benefit transfer advice, according to the economic secretary to the HM Treasury, John Glen.
In a debate in parliament today (April 10) about pension transfers and the British Steel Pension Scheme debacle, Mr Glen said following the regulator's data work on firms with transfer permissions it was expected it will go back and revisit a select group - those with the biggest amount of business on their books.
Mr Glen said the FCA is developing a working programme in this space, which is also likely to include "targeted education for firms involved in providing DB transfer advice".
In the interim report on its current work on pension transfer advice, published in December, the regulator found a mere 48.1 per cent of advice it had looked at was deemed suitable. The work is expected to provide a complete picture of the whole of market since 2015.
The regulator stated in December: "Any firm that is active in this market can expect to be involved in our work in 2019. We will not hesitate to use our investigatory powers where we identify evidence of serious misconduct which could have caused harm to consumers."
Regarding the BSPS case, which resulted in 10 firms stopping to give transfer advice after they were identified as key players advising steelworkers to transfer out of the scheme, Mr Glen revealed there were still "a number of live investigations underway".
He said: "There are companies being actively investigated now, and I’m imminently expecting the FCA to be making recommendations, there are announcements to be made."
Shadow pensions minister Jack Dromey called for a sense of urgency from the FCA and the South Wales police on investigating potential criminal wrongdoing and taking action.
BSPS had about 130,000 members of which 44,000 were deferred, and 8,000 transferred out of the scheme by October last year, collectively worth about £2.8bn.
Some of the steelworkers appeared to have been wrongly advised, and their complaints have reached the Financial Services Compensation Scheme, which has been paying out in relation to liquidated advice firm Active Wealth.
Mr Glen responded: "It’s an absolute imperative that the FCA works with all bodies to hold these individuals into account and take appropriate action given the evidence that has been presented to them.
"This is urgent, and the individuals who have suffered through this experience are expecting that of them, and I believe they are aware of that."
Mr Glen also stated the FCA was making progress regarding phoenixing firms - the process by which a firm is declared insolvent or closed down by the owner, only for them to set up another firm in a new name carrying out the same business.
He said: "The FCA has a range of tools to identify and act against firms or individuals who try to avoid responsibility in this way, those seeking to liquidate firms must provide information about outstanding complaints and the assets of collapsed firms cannot be sold on or passed back to former directors without the prior consent of the regulator.
"The FCA has already used these powers to prevent several businesses and individuals from avoiding their liabilities, and other cases are currently under investigation. It has caused some individuals to withdraw their applications knowing full well they are not going to get through."
maria.espadinha@ft.com
