The Financial Conduct Authority (FCA) has revealed that only 51% of the 129 transfers it has reviewed from the British Steel Pension Scheme (BSPS) were clearly suitable for the client.
In a letter to Work and Pensions Select Committee chairman Frank Field, FCA chief executive Andrew Bailey set out the scope and progress of the regulator's work on BSPS pension transfer advice.
Bailey revealed the FCA has reviewed 129 cases across 21 firms relating to advice to transfer out of the BSPS. While 51% were determined to be suitable, 33% were deemed unsuitable, and in a further 16% of the cases it was unclear whether the advice was suitable or not.
The FCA has contacted these 21 firms, but Bailey highlighted that it had not yet seen any evidence of funds being invested in scams.
As part of its information gathering exercise, the regulator contacted 11 Sipp operators to ascertain whether they had received, or expected to receive, any transfers out of the BSPS.
The operators were then asked for the names of the advice firms along with details of transactions, including the receiving funds, and this information, along with other correspondence, led the regulator to contact 109 advice firms.
Of these, 66 were required to offer further information on their business volumes, pipeline clients and 'insistent clients'. From here, the FCA decided to undertake 21 firm assessments.
The 51% figure for suitable advice for British Steel members was actually higher than what the FCA found in its wider review of transfer advice which looked at 88 cases from all firms operating in the market. Last October it said that just 47% of this wider sample, constituted suitable advice.
We discussed DB transfers with two advisers, Steve Buttercase, principal of Verve Investment Planning, and Anna Sofat, managing director of Addidi Wealth, in an episode of our podcast recorded during last week's New Model Adviser® Conference and Awards. Listen below: