Nick Smith MP Labour MP for Blaenau Gwent
NICK Smith, MP for Blaenau Gwent, has welcomed news that the financial services watchdog is making moves to stamp out rogue advisers.
Mr Smith has campaigned in Parliament on behalf of British Steel Pension Scheme (BSPS) members who were given bad advice during the steel pensions crisis of 2017 and has called for tough action to be taken against those responsible.
The scandal occurred after BSPS members were given a deadline to decide what to do with their pensions as part of a restructuring process.
Many lost large amounts of money to poor investments after being given bad advice by what Mr Smith has referred to as “pension sharks”.
The Financial Conduct Authority (FCA) has today (June 5) announced a package of measures including banning contingent charging, and providing better advice for customers and improved help for conscientious advisers.*
Mr Smith said: “I have been calling for strong action over this issue for a long time and I think this is a good move by the FCA.
“A review of the British Steel cases by the FCA has found that just one fifth of the transfers that happened were suitable and that 47% were entirely unsuitable.
“This is a startling figure but unfortunately not at all surprising given what I have heard over the course of my campaigning on this issue.
“I am especially pleased to hear that contingent charging, where financial advisers only get paid if the pension transfer happens, will be banned. This type of arrangement rewards bad advice and offers no incentive for an adviser to tell a customer to stay in their current pension scheme – even if it’s the right thing to do.
“I welcome these measures as a means of starting to drive pension sharks out of the water for good, but I still think that many of the British Steel cases actually amount to complicated cases of fraud. I would like to see those who exploited steelworkers taken through the criminal justice system at a rate of knots.
“It has been over two and half years since this scandal broke water and justice delayed is justice denied.”
Mr Smith also welcomed the FCA’s announcement that it would be writing to all 7,700 former members of BSPS who transferred out.
Mr Smith said: “The idea is that members will be able to take another look at the advice they received and make a complaint if they have any concerns.”
* Full FCA press release here https://www.fca.org.uk/news/press-releases/fca-sets-out-next-steps-improve-defined-benefit-pension-transfer-market