The UK financial watchdog has published a letter to respond to complaints made regarding its actions or inactions in relation to the British Steel Pension Scheme (BSPS). 

The story began in January 2018, yet it became more public in February 2023 when the FCA implemented a redress scheme for pension scheme members who had received bad advice to opt out of their schemes. The authority found that 46% of all transfers were unsuitable.

Since then, the regulator has undertaken multiple activities against those advisers and firms that delivered the poor advice. To date, those actions have resulted in 15 bans for individuals and fines or payments totalling £8.87m ($11m) to the Financial Services Compensation Scheme. Some matters have also been referred to the Upper Tribunal.

Yet the FCA has received a number of complaints saying that its “response to events in relation to BSPS was insufficient and failed to adequately protect steelworkers, including complaints about the length of time it took to provide redress.”

“We have taken the unusual decision to publish our main decision letter so people can read for themselves how we reached the conclusions we have.”

FCA

The authority has now published a main decision letter that was shared with the complainants, in which it shares how concerns were considered, and how actions were taken.

“Given the very clear public interest in this issue, and to support our accountability to the public and to Parliament, we have taken the unusual decision to publish our main decision letter so people can read for themselves how we reached the conclusions we have,” the FCA said.

“We take all complaints seriously. We have sought to learn lessons as a result of events relating to BSPS and accepted a number of recommendations made following the significant public scrutiny and independent reviews into BSPS, for example by the National Audit Office.”

Complaints to the FCA

One of the complaints accused the FCA of being “behind the curve to respond catastrophic impact on members “, because the authority was made aware of the transfer issues at least in 2017. Therefore, the complainant said that it was “inexcusable that the FCA was not more prepared for this potential scandal.”

The complaints also alleged the authority to have:

• failed to protect consumers in accordance with its operational objective of consumer protection when it knew them to have been mis-sold to or were likely to be mis-sold to;
• failed to sufficiently be proactive or timely with its enforcement powers, and failed to act to protect those affected in a timely way; and
• that its actions resulted in inconsistent outcomes for consumers entitled to compensation.

“We concluded that, while there have been lessons for us to learn, for example, in strengthening links with partners, such as the Pensions Regulator, we took appropriate regulatory action based on the information available at the time,” the FCA said. ”We have, therefore, not upheld the complaints. We recognise that this will be a disappointing outcome for complainants.”

British Steel Pension Scheme

Since 2023, the FCA has taken enforcement actions against 15 firms and individuals in relation to the British Steel Pension Scheme, with sanctions totalling payments totalling £8.87m ($11m). The actions included:

• March 2024 – Inspirational Financial Management Ltd fined £897,840. Arthur Cobill, an adviser at IFM, and William Hofstetter, one of its directors, banned and fined £120,000 and £40,00.
• November 2023 – Two advisers banned and fined £26,800 and £40,888.
• November 2023 – A First Supervisory Notice with restrictions on KBFS Financial Limited.
• November 2023 – Person banned and fined £200,000.
• October 2023 – Two advisers and banned and fined £2,212,316 and £397,400.
• October 2023 – Pension transfer specialist and financial adviser banned and fined £158,600.
• September 2023 – Two advisers were banned and fined £70,000 and £85,606.
• September 2023 – Two former directors of CFP Management Ltd were banned and fined £681,536 and £632,594.
• July 2023 – Adviser banned and ordered to pay £850,000 in redress to clients.
• June 2023 – Adviser banned, and ordered to make a £106,000 payment to the Financial Services Compensation Scheme.
• June 2023 – Three more firms forced to reverse misleading pension offers.
• May 2023 – Adviser censured  over incorrect advice to British Steel pensioners.
• February 2023 – 15 more firms named in the row over the redress scheme.
• February 2023 – Two firms, Abbey Lane Financial Associates Limited and Estate Capital Financial Management Limited, forced to stop making deceptive offers to British Steel pensioners.
• January 2023 – Warning issued to firms over a ‘deliberate attempt to exclude’ pensioners from the compensation scheme.