30 Cowboy Pension Transfer Advisers Investigated

Labour MP Nick Smith claims that 30 unnamed financial advisers are currently being investigated by The Financial Conduct Authority (FCA) for poor pension transfers advice as well as scams.

15 of the businesses and individuals have already had action taken against them for pensions misconduct by the FCA in the last 15 years. 

Mr Smith has asked the Government to be more aggressive in finding and removing these cowboy advisers and protecting peoples pensions.  There should be tougher penalties and the possibility of facing criminal prosecution.

It was announced by the regulator last year that a whole of market review into pension transfer advice was to be done and found that roughly half the advice given was not suitable.

Currently the Financial Services Compensation Scheme (FSCS) are dealing with a group of steelworkers that claim they had been given wrong advice after transferring out of their BSPS pension scheme.  The FSCS have agreed to pay out to affected clients but as they said back in January, British Steel Pension Scheme (BSPS) members will not be receiving a reduced discount rate for compensation calculations in claims relating to liquidation advice firm Active Wealth.

Active Wealth entered liquidation in February 2018 as they were one of the 10 firms that stopped giving transfer advice when they had been reported to be advising members to transfer out of their BSPS pension.

Comment

Firstly let’s make a distinction:  The old British Steel group is now split and owned by two separate groups Tata and Greybull (renamed ‘British Steel Ltd’ let’s call it “new British Steel”).  (New) British Steel itself is now in trouble and asking for a government loan or facing liquidation itself.  Misery on all sides for steelworkers.  We still wonder whether the government did this by design i.e. let’s get all BSPS members to transfer to a good but still worse scheme i.e. the new British Steel Pension Scheme Number 2 (BSPS 2) and then let the business die?  Some financial advisers may feel a little bit ‘hard done to’ if British Steel folds and then ultimately the main (old British Steel group) now Tata, which also runs BSPS 2, then fails.  Time will tell whether Indian group Tata continues to support steel in the UK and ultimately the BSPS 2 or walks away and all steel worker pensions end up with the Pension Protection Fund only anyway.

Is it the Government that are the real cowboys?