The Financial Conduct Authority has written to individuals who transferred out of the British Steel Pension Scheme in 2016, urging them to file their complaints as soon as possible.
In a letter published on May 18, the City watchdog noted that there is generally a six-year time limit to complain and urged steelworkers to “complain now before it’s too late”.
The letter, titled “ACTION NEEDED: if you transferred out of the British Steel Pension Scheme in 2016”, outlined a number of steps to check an individual’s advice or complaint.
It told customers to check whether the advice was unsuitable using its advice checker, relaunched last month, and to complain to the company that gave the advice if there was any cause for concern.
We encourage you to consider the content of this letter and to act as soon as possible
Financial Conduct Authority
The FCA said to call, write to or email the company. It added that if the individual was not satisfied with their response, it can complain to the Financial Ombudsman Service.
“We are writing to you because you transferred out of the BSPS in 2016,” the watchdog wrote.
“Many people who have transferred out of the BSPS received unsuitable financial advice and could be entitled to compensation. You could be one of them.
“We encourage you to consider the content of this letter and to act as soon as possible. The FCA regulates financial advisers in the UK. We make the rules that financial advisers must follow and hold firms to account where they fall short.”
FCA consulting on redress scheme
The FCA said it is consulting on a redress scheme announced in March in a bid to help former BSPS members who received unsuitable financial advice to transfer their pension.
The regulator plans to deliver £71.2mn in compensation to former BSPS members who received unsuitable advice and an estimated 1,400 steelworkers will be involved.
Redress represents a transfer to BSPS members who received unsuitable pension transfer advice from the companies that provided that advice, to the extent that they remain in business.
If the scheme is implemented in line with the regulator’s proposals, then financial advice companies that advised members of the BSPS between May 26 2016 and March 29 2018 will have to review their advice.
“If the advice they gave was unsuitable, then the firms will have to calculate if they owe compensation. If we introduce the scheme, we expect it to come into force in early 2023,” the FCA wrote.
The watchdog said there is a possibility that advice received by an individual will not be covered by the proposed scheme because too much time has passed.
Industry bodies and individuals welcomed the redress scheme announcement.
Commenting on the paper, MP Nick Smith said it has been “like pulling teeth to get to this point”, but welcomed the scheme by the FCA.
“I have been working with steelworkers and campaigners on this for four years now and I know the toll it has taken on so many,” he said.
“I have been pushing for a redress scheme because I believe this is the best way to put things right for the steelworkers that were targeted by pension sharks.”
The BSPS case
In 2017, BSPS members were asked to make decisions about their pensions as part of a restructure of the scheme.
About 8,000 members transferred out of the scheme, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised, leading to an intervention from the FCA that resulted in a number of advice companies stopping their transfer advice service, while others went out of business.
The debacle created a mountain of liabilities, which lawyers believe could end up costing the industry up to £300mn.
In September, the FCA and the Financial Services Compensation Scheme travelled to Swansea to meet steelworkers who could be due compensation but were met with a mixed response, with some showing no interest, while others claimed they were unable to book a place.
The City watchdog also travelled to Swansea in November to meet steelworkers about bringing possible claims against advisers.
Free tool launched to help pension transfer clients identify scams
Help & Advice has introduced a scam predictor to allow those considering a pension transfer to check whether they are at risk of being scammed.
Earlier this year, the FSCS said it had paid out more than £36.5mn in compensation to BSPS members, as of January 25.
Last month, the FCA announced emergency powers to prevent companies that advised members of the BSPS from disposing of assets to avoid paying compensation. However, advisers questioned why the regulator was delayed on using its powers.
This came a week after the FCA said it stopped David Stock & Co Limited discarding its assets without the regulator’s permission.
An earlier version of this article appeared on FTAdviser.com
