Financial Services Compensation Scheme  

Breakdown of claims against British Steel pension transfer adviser

Breakdown of claims against British Steel pension transfer adviser

The Financial Services Compensation Scheme (FSCS) has given a breakdown of the claims it has received against British Steel IFA Active Wealth.

Data released by the scheme today (15 May) showed of 29 claims received so far 16 related to a pension transfer to a personal pension, while seven went to a self-invested personal pension (Sipp). 

Of the remaining claims three related to other pension advice, while two were in conjunction with a regulated and unregulated collective investment scheme, and one was to do with a pension opt out.

Active Wealth entered into liquidation in February after the firm was told to cease any pension transfer activity by the Financial Conduct Authority (FCA) months earlier.

It was one of 10 firms which stopped giving transfer advice after they were identified as key players advising members of the British Steel Pension Scheme to transfer out of their defined benefit (DB) pensions.

The firm had advised as many as 300 British Steel pension clients, of which 64 proceeded to transfer out of the British Steel pension scheme into alternative pension arrangements without taking further advice.

FTAdviser reported in November that Active Wealth was working alongside unregulated introducer firm Celtic Wealth Management & Financial Planning, which referred the clients to the adviser.

Al Rush, principal of Echelon Wealthcare, who is assisting steelworkers affected by the debacle, said he was “surprised and intrigued” by the breakdown.

He said: “I thought that the complaints so far would have related entirely to the advice to transfer into [Sipps].

“Many steelworkers have subsequently moved their pensions to more vanilla arrangements, either with an insurance company or onto a platform.  None of those transactions have been the subject of a complaint as far as I know.”

Mr Rush estimated about 60 to 70 steelworkers will be making complaints while some more could come from retail clients who were sold into small self administered schemes “by organisations closely or more loosely involved with these protagonists".  

He said: "This week alone, two more steelworkers have approached me, neither of whom have yet made a complaint.

“I always said this was just the tip of the iceberg, and so it seems, that gloomy prediction is coming to pass.”