Transfers from the British Steel Pension Scheme (BSPS) were deemed too risky for the UK's largest advice firm.
St James's Place (SJP) yesterday said that it had taken a commercial decision to stop accepting new business from BSPS members who wanted to transfer out.
A spokesman for SJP has since told New Model Adviser® the firm took this decision because it was concerned such business could be too high risk.
'We have monitored closely the cases and clients looking to leave the BSPS and taken a view that continued participation in this market could put us outside our risk appetite for advising clients on such transfers.
'We are confident that we have been able to provide suitable advice to the small number of clients we have advised to date.'
The closure of the BSPS has forced many local IFAs to 'shut up shop' to new clients due to high demand for transfers from the scheme. This has left a gap for advisers from around the country to fill.
With a network of more than 3,500 advisers, SJP was expected to be one firm active in the area. However it has taken the decision that doing so would potentially raise problems in the future.
SJP partner firms are members of a network. This means that although firms have to meet compliance requirements laid down by SJP, they are not run centrally, and business owners are given some freedom in how they organise their own advice firms.
This has caused embarrassment for SJP in the past. In November, New Model Adviser® revealed that SJP was investigating an unsolicited email sent from one firm which described current high transfer value levels as 'irresisitible'.
A spokesman for SJP at the time said: 'We have strict guidelines in place regarding the advice provided by partners in relation to defined benefit pension plans, as well as all communications to client and potential clients.'