British Steel  

Pension firm facing 12 claims fails with FSCS

Pension firm facing 12 claims fails with FSCS
  (Pixabay/Alexander Kovalev)

An advice firm facing 12 claims over its pension transfer advice, some of which relate to the British Steel Pension Scheme, has failed.

Yesterday (November 22), the Financial Services Compensation Scheme declared Bartholomew Financial Limited in default. 

A spokesperson for the FSCS told FTAdviser all 12 claims related to pension transfer advice, and that this total included some BSPS claims.

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According to Companies House, a voluntary liquidator in Birmingham was appointed to the Cardiff-based firm back in May and it was wound up.

Upon being wound up, the firm had over £127,000 in available assets, most of which sat in the directors loan account.

Once debts of around £62,000 were shaved off, the firm was left with around £64,000 in the bank, according to the liquidator’s statement of affairs notice.

Back in July, two pension advice firms facing 88 claims between them were declared in default by the FSCS. They included a number of BSPS claims.

The BSPS transfer scandal, which saw hundreds of British Steel workers fall victim to unscrupulous financial advisers and lose thousands from misadvised pension transfers.

Earlier this year, MPs said the Financial Conduct Authority had “inadequate oversight" of firms involved in the BSPS transfer scandal and was “consistently behind the curve” when responding to issues.

The group of MPs said that by 2017 when the BSPS was well underway, the FCA still “did not know” what was happening in the defined benefit pension market and it had “inadequate oversight of the firms involved”, only later finding out that “47 per cent of cases the advice provided was unsuitable”.

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 £300mn.

In September 2021, 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 2021 to meet steelworkers about bringing possible claims against their adviser.

In March, the FCA set out plans to deliver £71.2mn in compensation to former members of the BSPS who received unsuitable advice to transfer out of their pension.