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FCA will write to 7,700 steelworkers to review pensions advice

Following a review into firms responsible for defined benefit (DB) transfers, the city watchdog has decided to write again to former members of the British Steel Pension Scheme (BSPS). 

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47% of advice given to steelworkers appeared to be unsuitable
47% of advice given to steelworkers appeared to be unsuitable

In an update on its work on defined benefit transfer advice, published on June 5, the Financial Conduct Authority (FCA) announced a set of measures to address weaknesses across the market.

 

As part of this announcement, the FCA said it had conducted in-depth reviews of the 85 most active firms in the market, who were responsible for 43 percent of transfers between April 2015 and September 2018. The aim of this was to identify those firms most likely to be providing unsuitable advice.

 

Some of the files reviewed by the FCA included advice given to members of the BSPS.

 

The FCA found that the percentage of unsuitable files was higher than those in the rest of the sample. 192 instances of advice to former BSPS members were reviewed within these phases of its work. Of these, the FCA said 21 percent appeared to be suitable, 47 percent appeared to be unsuitable and 32 percent appeared to contain information gaps.

 

The FCA said it has already undertaken a number of actions designed to help those who transferred out of the British Steel Scheme, including writing to almost 4,000 former scheme members advising them how to complain, and holding events in Port Talbot.

 

The watchdog now intends to write directly to all former members of BSPS who transferred out. This will help the 7,700 steelworkers revisit the advice they received and to complain if they have concerns.

 

As for the measures to address the weaknesses of the DB transfer advice market, these will include:

  • Steps to reduce conflicts of interest by banning contingent charging;
  • Help for advisers who want to provide good quality advice;
  • Support for customers who have transferred out of a DB scheme, or are considering to.

Read more here.

 

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