FCA says it knew of problematic BSPS advisers

The Financial Conduct Authority (FCA) has again been discussing its plans to name firms under investigation – and has again brought up the British Steel Pension Scheme (BSPS) scandal to explain its reasoning.

Speaking to parliament’s Treasury Committee on Wednesday, 8th May, FCA CEO Nikhil Rathi explained that the regulator knew that firms were providing unsuitable advice to BSPS members but couldn’t warn them about what was happening.

The FCA is seeking greater powers to name firms under investigation if it feels it is in the public interest to do so. However, government officials and industry trade bodies have spoken out strongly against the plan.

Citywire New Model Adviser said one industry insider it had spoken to said: “This smacks of the FCA looking to be seen to be doing something, and I’m not sure invoking British Steel necessarily says what the FCA thinks it says.”

In responding to criticism of its proposals, the regulator previously said that naming firms under investigation could prevent scandals like the BSPS debacle from happening. Meanwhile, comments on an earlier Citywire New Model Adviser report raised concerns that the regulator may use the naming of firms as a replacement for completing a full investigation.

Rathi told MPs: “The FCA had information about problematic financial advisers being investigated.

“The steelworker pensioners were not aware we were investigating. They were calling our contact centre and being told the firm they were asking about was on the FCA register and no further information was disclosed.

“They then took advice and potentially lost their life savings. That was the point that the public accounts committee asked us to look into, in this context, whether there was more we could say in those circumstances.”

FCA stands by plan

The FCA’s chair, Ashley Alder, was also present at the Treasury Committee and reaffirmed that the regulator would conduct a “serious public interest test” before naming firms it was investigating.

Alder also noted that not all firms under investigation would be named, admitting that many cases would not pass the public interest test. Alder did not detail what the public interest test might entail.

A spokesman for the Personal Investment Management & Financial Advice Association (PIMFA) told Citywire New Model Adviser that Alder’s remarks did not ease its concerns, saying: “While we appreciate the FCA’s assurances that any announcement of enforcement activity would need to meet a strict public interest test and that this would not occur on an infrequent basis, it remains the case that to the best of our knowledge, no consideration of what is in the public interest is to be extended to the interest of firms.

“This needs to be a core consideration in the FCA’s approach going forward and in particular a consideration of what the likely impact on firms will be in the event of this activity finding no case to answer.”

Instead of “naming and shaming”, PIMFA wants the FCA to publish anonymised information about any investigations it is conducting and point consumers towards any guidance it issues on the matter.

How can I discover if my adviser is being investigated?

If you’re concerned about financial advice you received and feel that it was unsuitable or you were mis-sold a financial product, it will be challenging to discover if your adviser is under investigation.

However, you don’t need to wait for the answer before starting a mis-selling claim.

At LawPlus Solicitors, we can conduct a free, no-obligation review of your financial advice or pension transfer and let you know if we believe you may be entitled to compensation. You can also check out our pensions mis-selling page to discover some of the indicators of mis-selling and unsuitable advice before you proceed.

If you wish to instruct us to bring a claim on your behalf, we can do so on a no-win, no-fee basis. And if it’s later made public that the FCA investigated your adviser and they were found to have been providing unsuitable advice, that’ll likely make it even easier to prove your case and get your money back.

Contact us now to get started.

Image Credit: Piotr Swat / Shutterstock.com


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