In what is becoming a regular occurrence, the Financial Services Compensation Scheme (FSCS) has declared another two pension advice firms in default. The two firms – Smith, Law & Shepherds and County Capital – were reported to be facing 88 pension claims between them.
These rulings are the latest in a long line of such actions involving firms that had given unsuitable pension transfer advice to members of the British Steel Pension Scheme (BSPS). However, the claims faced by both firms are not thought to be exclusively linked to the BSPS transfer scandal.
In addition to the significant number of firms the FSCS has declared in default in recent months, the Financial Conduct Authority (FCA) has also been active in recent months in preventing advisers involved in giving unsuitable advice to BSPS members from disposing of their assets.
The FCA has recently been accused by parliament’s Public Accounts Committee of lacking oversight into the activities of firms involved in the BSPS transfer scandal and of being “consistently behind the curve” in responding to issues.
Before being declared in default by the FSCS, Smith, Law & Shepherds had been issued an enforcement action notice by the Information Commissioner’s Office (ICO) in March after failing to provide two of its clients with data regarding their pensions. While the firm sent the requested data on the day it received the ICO notice, the two clients had been waiting nearly two years to receive the requested data.
The fallout from the BSPS transfer scandal continues, with questions remaining about how financial advisers self-assess the advice they provided to savers about their transfers. In addition, while the FCA has also laid out details of a proposed redress scheme, it has been urged to reconsider its approach on the back of fears that BSPS pension scheme members could be massively out of pocket even after receiving compensation.
However, it remains to be seen whether savers will be returned to the position they were in before their transfer or will have to settle for compensation capped by the respective limits of the Financial Ombudsman Service (FOS) or the FSCS.
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