NOTIFICATION OF A PUBLIC MEETING FOR ALL THOSE WHO FEEL THEY MAY HAVE BEEN MIS-SOLD A PENSION TRANSFER IN AND AROUND PORT TALBOT
Stephen Kinnock MP is attending a public meeting at the Twelve Knights Hotel in Margam, Port Talbot at 1530 on 1 Feb 2019 to discuss fresh and emerging concerns surrounding financial advice given to members of the British Steel Pension Scheme (BSPS) to transfer out of their final salary pension. Concerns have been highlighted by the Regulator, the Financial Conduct Authority (FCA), which conducted a major review last year and found that the majority of cases to transfer out of a final salary pension were unsuitable.
Following FCA intervention, four of the firms which advised in and around Port Talbot volunteered to have their permission to advise on pension transfers , revoked. Three of them are still unable to facilitate pension transfers. Those three were closely associated with the advice to transfer many steelworkers out of BSPS, one of them, most notably, was Active Wealth (UK) Ltd which subsequently put itself into liquidation.
Having successfully assisted Active Wealth (UK) Ltd’s victims, Stephen is now increasingly concerned that some other advisers badly advised steel workers to transfer out of the BSPS. Those who were wrongly advised to transfer may have lost significant sums whilst their advisers benefitted and continue to benefit from the transfer.
Stephen Kinnock MP said: “The fact that some financial advisers feel they can exploit hard-working steelworkers and their families is bad enough. But when the FCA knows that bad practice has taken place and does not address it by informing the steelworkers that their pension transfer specialist has had their permissions removed, and that they may like to get their advice checked before its too late, then it’s time for the community, once more, to speak up.
The fight for justice for these men and their families did not begin and end with Active Wealth and Darren Reynolds. It spreads far and wide, and deeply. Other advisers, and other professional organisations such as investment companies and Self Invested Personal Pension providers, must no longer be able to look the other way and adopt a ‘see no evil’, ‘ask no questions, tell no lies’ approach, as long as the money continues to roll in.”
“There are very real concerns that hundreds of steel workers were deceived by some rogue financial advisers who preyed on unjustified fears about the Pension Protection Fund or the solvency of the replacement BSPS. It’s clear that unscrupulous advisers exploited steelworkers’ concerns about the proposed changes to the BSPS to their own financial gain by failing to correct the misconception that the new BSPS 2 was financially weak with potentially catastrophic consequences for the steel workers. I stand ready to continue to help my constituents, however I can, and this meeting is a strong first step that sends out the message - if you want to try and rip off workers, don’t do it in my constituency. I am glad to continue to give my constituents a clear and loud voice, right into the heart of London.”
Alastair Rush, an IFA who was instrumental in raising awareness of this malpractice said: “We always suspected that Active Wealth (UK) Ltd’s activities were the tip of the iceberg. The steelworkers I have spoken to were of the belief that, if they did not transferred out, they were in danger of losing their entire pension. These men did not transfer out because they were greedy and wanted to make a lot of money, they were terrified that they would lose everything that they had worked for. And in a vacuum of information created by trustees who simply weren't able to react properly, panic ensued. This panic was capitalised upon by Active Wealth (UK) Ltd and I fear others who appear to have acted in the most appalling manner.
Let’s be clear, the vast majority of independent financial advisers act in a diligent, highly professional manner. As a professional cohort, we are sick to the back teeth of paying levies that increase annually to pay for these rogues and their activities. We are frustrated that our profession gets maligned by default. We have had enough. As human beings though, we are just as appalled that a working man can have his lifetime of hard work snatched from him by a unconscionable grifter who simply looks at these financially unsophisticated people and sees, not a human being, but an easy mark. It’s time to get tough. However, for a variety of reasons, the checks and balances which should have served these men well, were not applied. Geographically, and in a regulatory sense, Port Talbot is a long way from London and these men operated almost at the end of the line, with impunity. Frank Field MP, Nick Smith MP and Stephen Kinnock MP have been instrumental in standing up for the rights of retirees in their communities and I salute and thank them.”
Philippa Hann, a solicitor who is acting on behalf of some of the steelworkers said: “The decision to transfer a defined benefit pension is a highly complex process and no one should ever be advised that it is a ‘no brainer’ yet we have heard that phrase crop up time and time again. The regulator requires there to be a clear reason for someone to transfer out of a valuable final salary pension scheme. Flexibility, concern over the final salary pension scheme, death benefits and early retirement, on their own, are simply not enough to justify a recommendation to transfer. The files that I have seen have contained inadequate information about the person being advised and contain unsuitable advice. I have advised those clients to pursue compensation.
It is simply not enough for a steelworker to say ‘I wasn't mis-sold because I wanted to transfer anyway.’ It is the role of the adviser to start from a default position that a transfer is unsuitable - however, we have seen evidence that some advisers acting in a way that they were reduced to that of an order taker, failing to provide proper advice and charging on a contingent basis. In other words, they only get paid if they recommend thetransfer. Where the financial adviser failed to challenge the perception that the new scheme may fail, and instead preyed on fears that it would , then the decision to transfer has to be seen as unsafe. Where this might be the case, it is absolutely vital that the individual gets their advice checked as soon as possible. If it transpires that the advice was wrong, then a fair claim for compensation should be considered, to replace the significant losses which are likely to have been suffered.”
The presentation will also be attended by Rory Percival. Percival was previously technical specialist at the Regulator, the FCA, focusing on how the FCA supervised financial advisers and designed the FCA’s approach to assessing the suitability of investment advice, thought leadership, quality assurance and designing the process for assessing firms. There is no one in the UK better qualified to offer an informed perspective about what a good or bad transfer advice case should look like.