MPs hammer FCA conduct on British Steel as all transfer advisers to be investigated

Work and pensions select committee chair Frank Field

The work and pensions select committee has published documents it believes raise serious concerns about how the FCA has handled the British Steel Pension Scheme saga.

The documents are responses from the FCA, the financial advice firm Active Wealth and “introducer” firm Celtic Wealth, following evidence on BSPS in parliament in December 2017.

The responses raise a series of further questions about the FCA’s actions in regard to the BSPS, which the committee will be pressing them further on.

These include the timeline of FCA intervention in the BSPS, including specifically in relation to Active Wealth.

Although it is apparent Active Wealth  was already on their radar, the FCA first contacted the firm about the BSPS specifically in November 2017 – two months after BBC investigators presented it with evidence they had uncovered on Active Wealth and Celtic Wealth.

The FCA had requested case files and outlines of business processes from Active Wealth between August 2016 and February 2017, leading to a visit by the FCA in July 2017.

As a result, Active Wealth’s director Darren Reynolds agreed not to recommend any “non-standard assets” to clients. It is unclear whether this means that Active Wealth had been recommending “non-standard assets” to pension transfer clients before July 2017.

British Steel: Could trustees have done more to help advisers?

The FCA finally required Active Wealth to cease advising on new pension business 14 months after it first started digging, and just weeks before the original deadline for BSPS members to make a decision on their pension.

The description by Active Wealth of the scheme’s reductions for early retirement as “taking a penalty” and “suffering a penalty” raises the question of whether they were using this pejorative characterisation of what is actually simply an actuarial calculation in their advice to clients.

Questions remain over the actual size of transfers handled and fees received for them. The highest transfer value that Active Wealth handled in respect of BSPS clients was £790,404 and the average was £398,347  – representing upwards of £40m transferred out of BSPS on their advice alone.

Active Wealth state they advised over 300 clients on BSPS transfers, “around a third” of whom acted on that advice to transfer out. Their director Darren Reynolds failed to answer the specific question of how many in total of those 300 plus individual pension savers were advised to transfer out of the “gold-plated” scheme.

The highest and average fees paid to them so far described as £1,500 and £1,443 respectively. The fees seem very small relative to the huge transfer values and it is unclear how many BSPS clients signed up to an ongoing adviser charge or what that might cost them ultimately in total.

SJP stops accepting DB transfers from British Steel members

Commenting on the responses published today, committee chairman and MP Frank Field MP says: “I have already described the FCA’s action on BSPS as grossly inadequate, and these responses do nothing to increase my estimation. The FSA was reformed and renamed amid concerns that it was too close to the financial businesses it was supposed to regulate.

“From their intervention in this affair it seems clear that the FCA’s actions still effectively protect these businesses’ ability to make money out of pension funds, rather than protecting pension savers. They must take care they are not sleepwalking into yet another huge mis-selling scandal.”

Two letters from FCA’s supervision director Megan Butler to Field contain a number of interesting points.

In the shorter letter Butler provides an update on the firms which have stopped transfers in relation to BSPS.

These include Active Wealth, Pembrokeshire Mortgage Centre Limited, Mansion Park, Vintage Investment Services, Retirement & Pension Planning Services, West Wales Financial Services, Bartholomew Hawkins and Inspirational Financial Management.

In the longer letter Butler explains the FCA in 2018 will be collecting data on all firms who hold pension transfer permissions to “build a national picture” of the entire market.

However Butler points out the FCA does not believe “a blanket ban or suspension” of transfers is warranted as many are “suitable”.

Reacting to the documents, Royal London director of policy Steve Webb says: “The FCA is quite right to gather systematic information about how the transfer market is working.  While the focus on the British Steel case is understandable, it is important that the regulator gathers data on the pensions advice which is given week-in, week-out across the country.”

Webb says: “It is in the interests of members, advisers and providers that the right people transfer and the wrong people do not, based on high quality, impartial advice.   If the FCA finds examples of bad practice they should be weeded out so that we have a healthy and effective market for pension transfer advice.”


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An influential Government committee has written to the FCA outlining its concerns that the regulator’s protection of British Steel Pension Scheme members remains ‘grossly inadequate’. In a 15 December letter to FCA supervision director Megan Butler, work and pensions committee chair Frank Field says it is apparent there are “insufficient protections” in place to prevent […]


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There are 10 comments at the moment, we would love to hear your opinion too.

  1. I am not sure how to take Mr Fields statement about the FSA being to close that is why it was renamed the FCA ? Reformed seems a bit woolly as well, in what way was it reformed?, it is the same buffoons sat at the same desks……

    To my mind they are not close enough, and trying to regulate an industry it neither understands or works with.

    Also Mr Field, the FCA fiduciary skill sett, is so absent, its not protecting businesses to earn money from pension schemes, its protecting its own existence, you may want to look at the salary bill, divided by staff alone….. talk about bias in our dealing with clients ….. there surly must be bias with the FCA protecting their need, and letting things like this (BSPS and many others) slip past only re-enforces their position

    You do have one thing right though grossly inadequate !

  2. Well said Frank Field

    • “Well said” maybe, but as ‘DH’ said, it’s the regulator that needs a closer look at, preferably on a full ‘CBA’ basis. Remember the “B.R.Aw” consultation & mantra, all of us trapesing up to their ‘tower’ to be lectured, returning to our firms, setting up the necessary regular monitoring & reporting, all at our own expense pf course, but expenses did the drum up on the teams running the ‘workshops’? Anyone heard of “B.R.Aw” since?

  3. Keep your chequebooks to hand to write the inevitable FSCS cheques…..

  4. The treasury select committee all wind and no action FCA just ignore them as they are not important AND HAVE NO POWERS.Frank Field like Andrew Tyrie before him all wind.

    • The time may finally have come when the FCA can no longer brush off the criticisms of a Parliamentary Committee. Frank Field, I think, is made of sterner stuff than Andrew Tyrie and won’t just back off. That said, one wonders what will actually happen if the FCA is forced to admit that its actions have been inadequate. I’ll bet no heads will roll.

  5. Well said Tim Harvey cheque books at the ready again was thinking of retiriig but clearly going to have to continue for the future FSCS PAYMENT i will have to cough up with the rest of the good guys.clearly it does not pay to be a good guy in our profession.
    As a result of this fiasco no help at all again from the FCA or treasury select all wind they need to buy a sailing boat between them and sail of over the horizon as our money does to them.

    • Stephen Underwood 12th January 2018 at 6:48 pm

      Rest assured there is only one group of people that will pay for yet another FCA blunder. I don’t understand how the FCA hierarchy can still get a bonus.

      Just typical. The small guy pays.

  6. Field is indeed made of sterner stuff … this is a guy who brought down one of the most powerful men in Europe. But whether he/others have the appetite for something big here is another question.

  7. Got to say this is totally disheartening. I had hoped like others we had left the bad old days behind where all our reputations we dragged through the gutter – but here we go again.

    Given we have never been as closely monitored, the costs never as high, the bureacracy never as detailed and our regulator never as powerful – I fail to see how this can happen.

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