Self-invested personal pension (Sipp) provider Momentum Pensions has put all further investments and pension transfers on hold from members of the British Steel Pension Scheme (BSPS).
The provider has also said that it will not charge any BSPS member who decides to change their mind on their transfer.
According to documents seen by FTAdviser, Momentum was one of the Sipp providers through which steelworkers' pension pots were invested as part of the advice given by Active Wealth.
Active Wealth has been suspended from accepting any new clients on pension business by the Financial Conduct Authority (FCA).
FTAdviser reported this week that several steelworkers appear to be transferring out their pensions after being lured by cheap deals by an introducer firm called Celtic Wealth Management & Financial Planning, which, because it is unable to give advice, then referred these clients to Active Wealth.
Several sources have said Celtic has been present at several roadshows from the scheme trustees, which are attended by members wanting more clarifications about their pensions and proposing to them a flat fee of £1,500 to arrange their DB transfers.
Around 130,000 steelworkers will have to choose to move their defined benefit (DB) pension pots to a new plan being created, BSPS II, or stay in the current fund, which will be moved to the Pension Protection Fund (PPF), by 11 December.
Of the total members, 43,000 are deferred, which means that transferring out their pension is also an option for them.
Mark Gaywood, group chairman of Momentum, told FTAdviser that the provider has currently 110 clients which transferred their BSPS pension. Among these 41 are fully invested, nine are currently in cash pending investment instructions and 60 in the pipeline pending transfer.
He said: “We are writing to all of the clients above, asking them to review matters and consider whether they wish to continue or seek further advice.
“All further investments and transfers are on hold pending client instruction, which we feel is acting in their best interests. We will also be providing them with a dedicated contact point if they have any concerns.”
Stefan Zaitschenko, a former Tata steelworker who helps run a Facebook group for members of the old scheme with 4,300 participants, said that steelworkers are concerned about an investment being made through Momentum.
He said that portfolios would be invested in equity based funds up to 40 per cent, with the remainder being committed to fixed income funds. Documents received by the steelworkers mention an illustrative return of 26.1 per cent over three years with a volatility of 7.6 per cent.
Mr Zaitschenko said: “We are concerned that this is not an appropriate retail investment.”
Mr Zaitschenko has, in the meantime, received feedback from Momentum regarding this issue.
The provider said that all funds “are invested in assets on the UK FCA standard assets list,” and that “Active Wealth are only one of 500 financial advisers they deal with, so there is no conflict of interest”.