Lighthouse Advisory Services, which was bought by Quilter Financial Planning in 2019, is continuing to give defined benefit (DB) transfer advice despite the FCA’s ongoing investigation into its DB work.
In a Friday (5 June) market update, Quilter revealed Lighthouse was one of the 30 firms facing an enforcement investigation, which arose from concerns identified during its ongoing work into DB transfer advice.
The Financial Conduct Authority (FCA) is currently investigating whether Lighthouse breached certain regulatory requirements in connection with advising on and arranging DB pension transfers between 1 April 2015 and 30 April 2019.
The update also confirmed the FCA has required Lighthouse to appoint a skilled person under section 166 of the Financial Services and Markets Act 2000 to conduct a review of certain DB pension transfers advised on during the aforementioned period.
Despite the investigation, Lighthouse is still advising on DB transfers. Quilter, which bought the firm in June 2019 for £42.2m, told PA: "Lighthouse is still advising on DB transfers and is doing so according to Quilter Financial Planning's processes and through Quilter Financial Planning's compliance teams, which includes an independent review of the proposed advice prior to issuing it to clients.
"This process is now being reviewed to take into account the FCA's announcements."
Last year Professional Adviser revealed four Lighthouse advisers were based at British Steel plants - two at Scunthorpe and two at Teesside - as a result of an affinity partnership between Lighthouse and Unite.
PA then went on to reveal Quilter was facing more than 40 complaints relating to advice given to British Steel workers by Lighthouse and an adviser from Quilter FP.
The majority of the claims related to advice given by Lighthouse, while some stemmed from advice given by Quilter adviser Daniel Thomas, who the network terminated on 20 September 2019 because he had not been following its advice processes correctly.
PA understands Quilter knew Lighthouse had advised steelworkers before it bought Lighthouse, however it had no knowledge of any problems with the advice given to the men. Quilter has set aside £12m to cover possible redress payments to British Steel workers advised by Lighthouse.
Commenting on the FCA's action Quilter CEO Paul Feeney said: "DB pension transfer advice can be the single most important piece of advice that clients can receive and so it is important that regulation around it is clear and the FCA's package of reforms is necessary. Quilter is committed to good customer outcomes and we will look to implement any necessary changes to our current process.
"Prior to our acquisition of Lighthouse in June last year, this business advised around approximately 300 British Steel pension scheme members to undertake a defined benefit transfer. Following the acquisition and an internal review of these cases, and complaints made prior to June 2017, concerns were raised about some of the advice given.
"We are now working with the FCA on this review into Lighthouse advice and our priority remains to do the right thing for our customers."
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