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DFM reviews British Steel transfer deal over exit fee concerns

Construction Building 480A Kent-based discretionary fund manager involved in a number of British Steel Pension Scheme transfers has said it is looking at ways to “resolve issues” with exit fees placed on members.

Gallium Fund Solutions is understood to have invested money placed with a platform called Vega Algorithms, which was popular with Sipp providers linked to introducers facilitating transfers out of the scheme.

Vega Algorithms is an authorised representative of Gallium.

A note on Gallium’s website says that it is reviewing the five-year lock-in that imposes 5 per cent exit charges on investors if they wish to leave early after they expressed concerns to the company.

The note reads: “Gallium and Vega Algorithms Limited are aware of concerns from investors transferring from the British Steel Pension Fund to the Vega platform service via their Sipps. In particular, that they had committed to a minimum five-year period and that there is a 5 per cent charge imposed by the underlying fund on investors who wish to exit early.

“We are in communication with the fund manager, investors and their advisers who wish to exit. We are working on a plan to resolve the issues surrounding the exit fee, which we hope to present to investors and their advisers in January.”

It is understood that Active Wealth, one of the advice firms whose pension transfer business has been suspended, appointed Sipp providers which used Gallium.

Active Wealth and another advice firm, Celtic Wealth, were asked to give evidence to MPs on the work and pensions select committee last month, but did not appear.

Committee chair Frank Field says he expects to hear responses from the firms by 8 January.

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Comments

There are 6 comments at the moment, we would love to hear your opinion too.

  1. What i’d like to know is what the 5% exit penalty is for? Who it is paid to and why?

    Outcome 6 of TCF?

    Consumers do not face unreasonable post-sale barriers imposed by firms to change product, switch provider, submit a claim or make a complaint.

  2. 5 Year Penalty lock in???

    Hey,the bad old days are back!

    Or perhaps for some people, they never went away!

  3. Just why? Well I think I know why, what is wrong with these people, vanilla funds/providers not sexy or sophisticated enough for a steelworker?

  4. “It is understood that Active Wealth, one of the advice firms whose pension transfer business has been suspended, appointed Sipp providers which used Gallium.”

    Given we’re talking about SIPPs, I suspect that’s more likely to be that the providers were instructed to use Gallium by their scheme members who in turn were advised by Active Wealth. That’s pure speculation, but – whoever’s right – I think it’s important to be clear about the causal chain.

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