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FCA visits advisers over British Steel DB transfers

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FCA visits advisers over British Steel DB transfers

Advisers in Port Talbot and the surrounding areas have been visited by the Financial Conduct Authority (FCA) to discuss transfers out of the British Steel Pension Scheme (BSPS). 

FCA director of strategy and competition Christopher Woolard (pictured) told MPs on Work and Pensions Committee that the regulator was directly addressing concerns about possible high levels of transfers out of the scheme following the takeover of Tata last year . 

‘In terms of thinking about the British Steel scheme, if someone wants to access their DB scheme a legitimate regulated adviser, that is the principle route how they would do it,' he said.

'One of the things we have done is a programme of visiting advisers in the Swansea and Port Talbot area and reminding them of their requirements.’

British Steel workers have been given a deadline of the end of the year to decide whether to transfer out of their pension scheme, move into a new scheme, or stay in the existing scheme when it falls into the Pension Protection Fund. 

For more on the options available to members of the BSPS read Henry Tapper's column

Last month New Model Adviser® revealed unions fears about advice firms targeting workers who are members of distressed DB schemes. 

The FCA has also raised concerns more widely about DB transfer advice.

At a conference last week Megan Butler, executive director supervision, investment wholesale & specialists division at the FCA, said it was worried that some firms have moved to a 'commoditised, industrialised process' when advising on DB transfers. 

The regulator has also contacted 13 firms about DB transfer advice, of which four have since voluntarily agreed to stop advising on transfers. 

Speaking to MPs today Woolard said charges were an important part of the regulator's work.

'One of the key failings we found here is a failure to take into account if you're taking the money out and transferring to an alternative form of investment, actually taking into account the charges and costs the consumer would face from being in that investment,' he said. 

Woolard said the 13 firms visited by the FCA 'account for the majority of the activity' taking place in the DB transfer market. 

He added: 'We are going to continue to follow the firms very, very closely in terms of the practice that is going on here.'

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