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British Steel adviser enters liquidation

British Steel adviser enters liquidation

Swansea-based firm S&M Hughes Limited, which trades as Crescent Financial, has started liquidation proceedings.

The firm, which was told to cease all regulated activities by the Financial Conduct Authority in May, sold its client book to Portfolio Financial Consultancy in July.

Portfolio told FTAdviser it would not be taking on Crescent’s liabilities as part of the deal and the money paid would be used to fund any future claims against the advice given to its clients.

According to a letter sent to creditors by its liquidator, seen by FTAdviser, the director of S&M Hughes has decided to commence liquidation procedures, so the company can be wound up voluntarily.

Alastair Rush, principal at Echelon Wealthcare, who has been involved in helping steelworkers with their pension decisions, previously revealed that several steelworkers had enlisted the help of the adviser to transfer out of the British Steel Pension Scheme.

The solicitor for S&M Hughes has been approached for comment.

Active Wealth is the only other British Steel adviser to enter liquidation to date and claims against it have already arrived at the Financial Services Compensation Scheme.

Laura Robinson, senior associate at Clarke Willmott, told FTAdviser S&M Hughes “faced a number of complaints after advising individuals to transfer away from valuable final salary schemes, mostly the steel works pension scheme”.

She added: “The firm’s creditors, including anyone with a claim concerning their pension transfer, have until September 4 to lodge proof of debt forms for consideration in the liquidation.

“Steelworkers will, in due course, be able to apply for compensation of up to £85,000 from the FSCS, but we suspect many individuals’ losses are greater.

"We’re acting for hundreds of steelworkers in respect of advice given by S&M Hughes and other firms in South Wales. We have recovered over £2m for our clients so far."  

Members of the BSPS were asked to decide what to do with their pensions as part of a restructuring process in 2017.

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 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 Pension Review Service.

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