BSPS firm placed under investigation by FSCS

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BSPS firm placed under investigation by FSCS

A Cheshire-based firm associated with the British Steel Pension Scheme transfer scandal is under investigation by the Financial Services Compensation Scheme.

Arrow Financial Services UK Ltd, trading as Arrow Asset Management, is being investigated by the industry lifeboat to see if it was involved in any regulated activities, and if these would give rise to any valid claims.

The firm, which traded as Arrow Asset Management between February 2016 and October 2019, was dissolved in July last year, according to Companies House.

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, in February this year a number of steelworkers wrote to the FCA expressing concerns about the regulator’s calculations for the scheme.