British Steel Mar 15 2023

Two BSPS advice firms placed under investigation

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Two BSPS advice firms placed under investigation
Chris Ratcliffe/Bloomberg

Two British Steel Pension Scheme firms have been placed under investigation by the Financial Services Compensation Scheme.

Green Gem Financial and Wealthmasters Financial Management were put under investigation by the FSCS yesterday (March 14).

Green Gem Financial, based in Birmingham, was put into liquidation at the end of November last year.

Wealthmasters Financial Management, based in Bristol, went into liquidation on February 20 this year.

A spokesperson for the FSCS said no claims details can be given while the firms are under investigation.

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.

The FCA announced last year that it plans to deliver £71.2mn in compensation to former members of the scheme who received unsuitable advice. 

The scheme covers those who transferred out between May 26, 2016 and March 29, 2018. 

However, last month a number of steelworkers wrote to the FCA expressing concerns about the regulator’s calculations for the scheme.