MPs on the Work and Pensions Committee will ask advisers with clients who are members of the British Steel Pension Scheme (BSPS) to give evidence as part of the inquiry into pension freedoms.
The inquiry has collected evidence on what people are doing with their pension pots, including defined benefit (DB) pension entitlements, and whether those decisions are consistent with their objectives.
On 13 December, the committee will hear evidence on DB transfers out of the BSPS scheme from individuals close to the subject.
Active Wealth, that voluntarily agreed to stop accepting new pension business last week after concerns it offered unsuitable transfer advice to steelworkers, has been invited.
Introducer firm Celtic Wealth Management & Financial Planning, that has been accused of luring steelworkers out of their DB pension by proposing them a flat fee of £1,500 on their transfers, according to reports.
Also invited are Echelon Wealthcare managing director Alistair Rush and First Actuarial director Henry Tapper. Earlier in November the two visited Port Talbot in Wales, a place where there is a British Steel factory and workers are abundant. The two spoke with steelworkers and advisers during their visit.
Representatives from the Financial Conduct Authority have been invited, as well as the union representing the steelworkers and some steelworkers themselves.
Although the Parliament website shows the deadline for written submissions was 23 October, a spokesperson for the committee told Professional Adviser they would look into re-opening the online portal as they were “particularly interested” to hear from financial advisers.
‘Factory gating’
Both Tapper and Rush have submitted written evidence to the inquiry. Tapper suggested members of the pension scheme had not discussed their future needs with advisers, nor did not understand the financial cost or the impact of charges for advice.
Rush meanwhile, said many members were given unsuitable advice “into expensive and needlessly complex solutions where there is an unrealistic chance of a positive outcome”. He also suggested ‘factory gating’ is happening, a practice he defined as “where opportunists, for their own financial gain, are plaguing the members”.
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