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FSCS investigating BSPS firm Prism

The Financial Services Compensation Scheme (FSCS) is investigating a financial adviser with links to the British Steel Pension Scheme (BSPS) scandal.

Prism Independent Financial Advisers Ltd was placed into solvent liquidation in late 2020. However, this year this has changed to a creditors’ voluntary liquidation, satisfying the first condition for the lifeboat fund declaring a default.

As such, the FSCS is now investigating claims against Prism and can declare the firm in default if it validates a claim. While the lifeboat fund hasn’t confirmed how many claims there have been against the firm, Prism is known to be connected to the BSPS scandal, so some of the claims likely relate to this.

What triggered the BSPS scandal?

BSPS members were asked to make decisions about their pensions during a 2017 scheme restructuring. Consequently, approximately 8,000 BSPS members transferred their pensions out of the scheme, with a total transfer value of around £2.8 billion.

However, like the broader final salary pension transfer mis-selling scandal, concerns about the suitability of advice and subsequent transfers quickly became evident. Many firms providing pension transfer advice stopped doing so, while some went out of business entirely.

The BSPS scandal has created a mountain of liabilities for the industry, with lawyers putting the cost at up to £300 million. In late 2022, the Financial Conduct Authority (FCA) unveiled a redress scheme for affected members, although this has not been without hiccups and controversy, with the regulator ordering some firms to stop making misleading offers.

A legal challenge brought by some advisers against the redress scheme also collapsed, while the regulator has also put many firms under asset disposal restrictions to ensure advisers pay compensation where it is due rather than the FSCS picking up the tab.

If your adviser fails, we can help you get compensation

If your adviser goes out of business, you can still claim up to £85,000 compensation for unsuitable advice or pension mis-selling.

Contact LawPlus Solicitors today for a free, no-obligation review of your financial advice and take the first step to getting the compensation you deserve.

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