Regulator bans more advisers over British Steel pension advice
By Kirstin Ridley
LONDON (Reuters) – Britain’s markets regulator said on Thursday it had fined two more pensions advisers and banned them from holding senior financial positions for wrongly advising steelworkers and others to transfer out of workplace schemes.
The Financial Conduct Authority has investigated around 30 firms and individuals and issued fines, bans and a public censure since December 2022, after British lawmakers said it was too slow to protect steelworkers from “vulture” advisers.
Steven Hodgson and Paul Adams, who worked for Vintage Investment Services, will pay 53,200 pounds ($69,101) and 32,700 pounds respectively towards a compensation scheme, the FCA said.
Such cases can referred to an Upper Tribunal for appeal.
In 2017, around 8,000 British Steel Pension Scheme (BSPS) members transferred their defined benefit retirement savings to plans with no guaranteed income, generating bigger fees for advisers. Almost half received unsuitable advice, the FCA says.
People who want to transfer out of defined benefit schemes, that offer a guaranteed retirement income, are required to seek financial advice if their retirement pot is worth more than 30,000 pounds to ensure a move is in their interest.
The FCA said Vintage advised 97% of clients with a defined benefit pension to transfer out, and almost 99% followed that advice. More than 90 were members of the BSPS and had accumulated around 375,000 pounds on average.
Adams and Hodgson were responsible for this advice and did not meet required standards in two thirds of cases, it said, adding that more than 130 customers continued to pay Vintage for ongoing advice after being wrongly advised to transfer.
“Mr Adams and Mr Hodgson fell far short …, earning significant fees for themselves in the process,” said Therese Chambers, the FCA’s joint head of enforcement.
“Their fines will go to the FSCS to offset the cost of their failings,” she added in a statement.
The Financial Services Compensation Scheme (FSCS), a safety net for investors when regulated businesses fail, has paid 1.07 million pounds in claims against Vintage.
($1 = 0.7699 pounds)
