In a letter published yesterday (May 18), the regulator said there is generally a six-year time limit to complain and urged steelworkers to “complain now before it’s too late".
The letter, titled “ACTION NEEDED: if you transferred out of the British Steel Pension Scheme in 2016”, outlined a number of steps to check an individual’s advice or complaint.
It told customers to check whether the advice was unsuitable using its advice checker, relaunched last month, and complain to the firm who gave the advice if there was any cause for concern.
The FCA said to call, write to or email the firm and if the individual is not satisfied with the response, it can complain to the Financial Ombudsman Service.
“We are writing to you because you transferred out of the British Steel Pension Scheme (BSPS) in 2016,” the City watchdog wrote. “Many people who have transferred out of the BSPS received unsuitable financial advice and could be entitled to compensation. You could be one of them.
“We encourage you to consider the content of this letter and to act as soon as possible. The Financial Conduct Authority (FCA) regulates financial advisers in the UK. We make the rules that financial advisers must follow and hold firms to account where they fall short.”
The FCA said in order to help former BSPS members who received unsuitable financial advice to transfer their pension, it is currently consulting on a redress scheme announced in March.
The regulator plans to deliver £71.2mn in compensation to former BSPS members who received unsuitable advice and estimated 1,400 steelworkers will be involved.
Redress represents a transfer to BSPS members who received unsuitable pension transfer advice from the firms that provided that advice, to the extent that they remain in business.
If the scheme is implemented in line with the regulator’s proposals, then financial advice firms who advised members of the BSPS between May 26, 2016 and March 29, 2018 will have to review their advice.
“If the advice they gave was unsuitable, then the firms will have to calculate if they owe compensation,” the FCA wrote. “If we introduce the scheme, we expect it to come into force in early 2023.”
The FCA said there is a possibility that the advice received by an individual will not be covered by the proposed scheme because too much time has passed.
Following the redress scheme announcement, industry bodies and individuals welcomed it, saying it will be a means to get justice for many.
Commenting on the paper, MP Nick Smith said it has been “like pulling teeth to get to this point” but welcomed the scheme by the FCA.
“I have been working with steelworkers and campaigners on this for four years now and I know the toll it has taken on so many,” he said.
“I have been pushing for a redress scheme because I believe this is the best way to put things right for the steelworkers that were targeted by pension sharks.”
The BSPS case
During 2017, BSPS members were asked to make decisions about their pensions as part of a restructure of the scheme.
About 8,000 members transferred out of the scheme, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised, leading to an intervention from the Financial Conduct Authority that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.
The debacle created a mountain of liabilities, which lawyers believe could end up costing the industry up to £300m.
In September, the FCA and FSCS travelled to Swansea to meet steelworkers who could be due compensation but were met with mixed feelings, with some showing no interest while others claimed they were unable to book a place.
The City watchdog also travelled to Swansea in November to meet steelworkers about bringing possible claims against their adviser.
Earlier this year, the FSCS said it had paid out more than £36.5m in compensation to BSPS members, as of January 25.
Last month, the FCA announced emergency powers to prevent firms who advised members of the BSPS from disposing of assets to avoid paying compensation, however advisers questioned why the regulator was delayed on using its powers.
This came a week after the FCA said it stopped David Stock & Co Limited discarding its assets without the regulator’s permission.
sonia.rach@ft.com
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