Work and pensions committee chair Frank Field has written to two witnesses who failed to attend last week’s committee hearing into the British Steel Pension Scheme to find out how they made money from clients.
Two out of six letters published on 19 December by the committee concern the activities of Active Wealth and Celtic Wealth Management, which have stopped giving DB transfer advice following work by the FCA.
Field wants answers to his questions by 8 January next year when parliament returns from recess.
One letter is addressed to Celtic Wealth Management managing director Clive Howells and the other to Active Wealth director Darren Reynolds.
Celtic Wealth Management, while not an adviser firm, is an introducer and has a business relationship with Active Wealth which has been under scrutiny from regulators and lawmakers.
In the letter to Howells, Field asks for a breakdown of the different fees Celtic Wealth Management charged to clients.
He wants to know the highest and average fee the introducer received from customers alongside the proportion of fees either paid directly by clients, independent financial or other companies.
Field also wants to know how many payments Celtic Wealth Management has made to individuals who recommended their services to clients.
In the letter to Active Wealth director Reynolds, Field asks what the highest and average transfer value handled in respect of British Steel customers was.
There are additional questions about what proportion of clients have been charged on a no transfer-no fee contingent basis/conditional basis and what proportion of customers are liable to pay ongoing fees.
Reynolds is also asked to provide information about how the firm assessed risk when providing investment advice to clients and the range of investment vehicles offered to them.
Field says: “Transferring out of a gold plated final salary pension is generally a terrible idea, except in very particular circumstances.
“Firms that are routinely advising people to take this route should be shut out of taking this type of business. I am very interested to hear the ‘particular circumstances’ that justify the advice Active Wealth gave, which they tell us resulted in around 100 members transferring out of the BSPS before they were stopped, and the total fees they have received for this wisdom.”