Advice giant Quilter is facing just shy of 50 complaints relating to advice given to British Steelworkers by Lighthouse and an adviser from Quilter Financial Planning.
RP’s sister title Professional Adviser can reveal Quilter is facing a total of 46 claims administered by solicitor firm Clarke Willmott, which is acting on behalf of steelworkers located in Port Talbot, Scunthorpe and Teesside.
So far two of the claims are with the Financial Ombudsman Service (FOS). PA understands Quilter are aware of all 46 claims and are liable for those claims.
The majority of the Quilter claims stem from advice given by Lighthouse. Lighthouse had a partnership with the steelworker’s union Unite to provide financial advice to British Steel Pension Scheme (BSPS) members.
Last year, Professional Adviser revealed four Lighthouse advisers were based at British Steel plants – two at Scunthorpe and two at Teesside – as a result of an affinity partnership between Lighthouse and Unite.
Quilter acquired Lighthouse in June 2019 for £42.2m. The completion of the deal saw some 400 advisers move to Quilter and its advice arm Intrinsic Financial Services, bringing the total number of advisers at the business to more than 3,900.
Elsewhere, PA understands the complaints relating to Quilter FP have stemmed from Daniel Thomas, who was director at Bridgend-based firm DPT Financial Solutions, an appointed representative of Quilter that is now inactive.
Quilter terminated Thomas on 20 September 2019 because he had not been following its advice processes correctly, which included completing proper paperwork and producing appropriate suitability reports.
A Quilter spokesperson told PA: “We are aware of these complaints relating to advice given by Lighthouse prior to Quilter’s acquisition of the business, which we take very seriously. We investigate all complaints thoroughly and will respond according to our standard procedures.
“At Quilter Financial Planning we understand the importance of advice on defined benefit (DB) pension transfers and any advice given by a pension transfer specialist within our network must go through a mandatory pre-approval process to ensure that our advisers deliver position outcomes for their clients.”
Professional Adviser has contacted a representative of Thomas for comment on the suitability of his advice.
‘Considering court action’
Clarke Willmott solicitor Philippa Hann said the losses incurred by those advised by Quilter were likely to “far exceed” the maximum amount that can be awarded by the FOS and was, therefore, “considering court action with our clients”.
The FOS compensation limits stand at £150,000 for any complaints referred to it before 1 April 2019, £160,000 for complaints about acts by firms before 1 April 2019, but which are referred to it after that date, and £350,000 for complaints on or after 1 April 2019.
Hann continued: “Thus far, Quilter has not provided any substantive response to the complaints we have directed to it. Anyone advised to transfer out of a final salary pension scheme and considering making a complaint should seek advice about the extent of their losses before deciding which avenue to choose to obtain redress.
“Quilter has also been asking our clients to sign limitless letters of authority to obtain their documents. No one should be signing a document which allows a third party to obtain documents about them which is unlimited in time and scope.”
So far Hann has looked at 450 files from 42 different financial firms and said she felt not a single one of those cases should have been advised to transfer out. Of the firms, she is acting against she said just one – which PA understands is Quilter – has the professional indemnity insurance to cover the claims. As a result, Hann said the other 41 firms would likely become insolvent. However, a claim against a firm does not necessarily mean it will be upheld.
In 2017 some advisers provided poor advice to steelworkers to transfer out of the BSPS, a DB scheme. As a result of that advice, the Financial Services Compensation Scheme has paid out more than £3m in compensation.