The regulator’s involvement in the British Steel Pension Scheme (BSPS) saga was “heavily influenced” by adviser whistleblowing, according to Financial Conduct Authority (FCA) technical specialist Chris Hewitt.
Speaking at The Great Pension Debate II in Port Talbot, the south Wales town where much of the poor practice surrounding BSPS pension transfers took place, Hewitt admitted it was advisers that prompted the regulator’s intervention.
“[The work on BSPS was] heavily influenced by whistleblowing we received from professional advisers and some individuals here in this very room,” he said.
“Towards the autumn of last year… we started to receive a number of pieces of intelligence from a variety of different areas raising concerns about the quality of advice specifically related to this scheme.
“We were already doing work [on defined benefit pension transfers], and it got to the point where we thought ‘What should we do? What is the most effective thing we can do?'”
The FCA took action in the form of four seminars – two in south Wales, and two in the Doncaster/Scunthorpe area – both close to British Steel plants.
Hewitt said geographically close pension transfer specialists were invited along to the seminars for two main purposes.
Firstly, he said, the FCA wanted to remind those more likely to give advice to steelworkers due to the proximity of their businesses, of what the regulator expected in the area.
The second “equally important objective”, Hewitt said, was to gain any additional useful intelligence from those advisers in the room.
“Even those that weren’t giving advice might be seeing [poor practice], and part of the idea of the seminar was to encourage them to share that information so we could take the next step and look more broadly,” he told delegates.
The regulator’s work in the area saw it carry out 14 firm visits and 172 file reviews.
As a result, a total of 13 firms lost their pension transfer permissions after transferring steelworkers out of the scheme.
For the remaining firms that are open and operational, presumably hoping to have their permissions restored, the FCA said it is looking for them to show they are mitigating the concerns expressed by the regulator about their practices.