In a debate in Parliament on Monday (July 15), Nick Smith, MP for Blaenau Gwent in South Wales, asked Mr Wallace for a meeting to discuss economic crimes against pensioners.
He said: "Poor pension transfer advice can amount to fraud, but in my experience local police officers often refer such cases to the Financial Conduct Authority, which often focuses on administrative penalties rather than criminal prosecutions."
Mr Wallace agreed with Mr Smith’s remarks.
He said: "While large sectors are regulated under the FCA, we have seen fraudsters exploiting marketing as a guise to escape that regulation.
"When we identify them, there are criminal investigations, but I should be delighted to meet […] and hear more about his views."
FTAdviser reported in March that Mr Smith had called on the government to come up with new criminal charges for rogue advisers.
At the time, he said members of the British Steel Pension Scheme had received poor advice, faced high adviser charges, and had seen their families’ fortunes put at risk.
Current enforcement measures such as de-authorising rogue advisers and fining them were not enough, he added.
Alastair Rush, principal at Echelon Wealthcare, who has been involved in helping former BSPS members with their pension decisions, argued that "too many advisers have engaged in industrial level practices and too many have attempted to breathe a veneer of respectability on what is a rotten and rancid process, with elegant yet meaningless reports which has exploited people who simply didn’t know what they didn’t know".
He said: "It’s time to jail the cowboys and the crooks and rid ourselves of the idea that white collar crime is harmless. It isn’t.
"Much of what has happened in and around Port Talbot is the equivalent of someone in a collar and tie coming around to badly re-tarmac your drive.
"There are many great advisers in South Wales but they are impacted by the bad apples. The sooner we rid ourselves of these carcinogenic influences, the sooner the silent majority can get back to restoring the reputation of good financial advice."
Problems started after British Steel owner Tata Steel formed plans to merge with rival ThyssenKrupp and pension liabilities were rearranged as part of a regulated apportionment arrangement signed off by the regulator in August 2017.
As a result, steelworkers were given until December of that year to decide whether to move their DB pension pots to a new plan being created, BSPS II, or stay in the existing fund, to be moved to the lifeboat Pension Protection Fund.
As a result about 8,000 members transferred out of the old scheme by October last year, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised leading to an intervention from the FCA, which resulted in 10 firms - the key players in the debacle - stopping their transfer advice service.
Some of these firms regained their permissions some months later, such as Mansion Park and County Capital Wealth Management, also trading as the Pension Review Service.
Other such as Active Wealth went into liquidation and claims against it have already arrived at the Financial Services Compensation Scheme.
FTAdviser reported earlier this month that the FSCS had paid £4.4m to former clients of Active Wealth.
maria.espadinha@ft.com
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