FCA tells steelworkers to complain about DB advice

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FCA tells steelworkers to complain about DB advice

The regulator has warned almost 8,000 former members of the British Steel Pension Scheme that to take "no action" against any unsuitable advice they might have received could leave them with no money during retirement. 

In a letter sent to 7,700 steelworkers the Financial Conduct Authority encouraged the former British Steel members to review the advice they had received to transfer out of the pension scheme, and make a claim against their adviser if needed. 

Earlier this month the City watchdog confirmed it was set to contact the steelworkers, after finding the percentage given unsuitable defined benefit transfer advice was higher than average.

Only 21 per cent of the 192 cases of advice reviewed by the FCA appeared to be suitable, 47 per cent were unsuitable and 32 per cent contained information gaps.

In its letter the FCA encouraged the former British Steel members to act on its concerns, warning "if you do nothing, you may end up with less, or no, money during retirement."

Megan Butler, executive director of supervision of the investment, wholesale and specialists division at the FCA, said: "Our findings are sufficiently concerning that we have taken the formal step of contacting you directly and encouraging you to act.

"You should check the advice you were given and, where appropriate, complain in order to seek any compensation you are potentially due."

Ms Butler added: "We encourage you to act, if you do nothing, you may end up with less money during your retirement than you should have done."

The regulator has already undertaken a number of actions designed to help those who transferred out of the British Steel Pension Scheme. Last year it hosted a series of events in Port Talbot for steelworkers "concerned about the advice" they received.

It has also previously written to almost 4,000 former scheme members advising them how to complain.

In its latest correspondence the FCA warned steelworkers to be "remain alert" to fraudsters contacting former British Steel members about their pension.

The regulator said: "If someone contacts you suggesting they are from any of the organisations listed here, or your adviser, or anyone else, end the call and contact us or Tpas directly. Do not give them any personal information."

Ms Butler said: "We know the last few years have been distressing for many members of the BSPS, and this has not been helped by the actions of some regulated financial advisers.

"The FCA – along with The Pensions Regulator, Financial Ombudsman Service, FSCS and Maps – remains committed to supporting you and taking action against any firms that are found to have provided poor advice."