The Financial Conduct Authority has begun an enforcement investigation against Lighthouse for defined benefit transfer advice linked to British Steel members.
In an update to the market this afternoon (June 5) Quilter, which bought national advice firm Lighthouse in June 2019, confirmed its subsidiary was one of the firms being investigated by the FCA.
The advice giant said the FCA was investigating whether Lighthouse breached its rules in connection with advising on and arranging pension transfers in the period from April 2015 to April 2019.
This comes after this morning the regulator confirmed it was pursuing 30 enforcement investigations against firms as part of its crackdown on poor advice in the defined benefit sector.
Quilter said: "The company confirms that the FCA has commenced such an investigation into Lighthouse.
"The FCA is investigating whether Lighthouse has breached certain FCA requirements in connection with advising on and arranging DB pension transfers in the period from 1 April 2015 to 30 April 2019.
"The company also confirms that the FCA has also required Lighthouse to appoint a skilled person under section 166 of the Financial Services and Markets Act 2000 to conduct a review of certain DB pension transfers advised on or arranged by Lighthouse in the period from 1 April 2015 to 27 January 2020."
Earlier this year Quilter revealed it had set aside £12m for potential defined benefit claims made against Lighthouse by British Steel Pension Scheme members, with at least 30 complaints concerning advice to transfer out of the defined benefit pension.
In today's update Quilter said it was fully cooperating with the regulator and the line of investigation only related to historic advice given by Lighthouse before it was acquired last year.
It said: "The FCA investigation and skilled person review only relates to Lighthouse.
"The period of the FCA's investigation covers the period before the Lighthouse acquisition and the period of the skilled person review covers the period before the Lighthouse acquisition up until 27 January 2020.
"That is the date on which Lighthouse's internal processes in relation to DB pension transfers were fully replaced by those of Quilter Group following completion of the Lighthouse acquisition."
Lighthouse was bought in a deal worth £46.2m, which saw an additional 390 advisers join Quilter's advice arm.
In March Quilter said it had begun its own review of 300 cases in which Lighthouse had advised members to transfer, roughly 80 of which took place prior to June 2017.
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