Active Wealth, one of the advice firms that voluntarily suspended its DB transfer permissions during the British Steel Pension Scheme (BSPS) episode, has been on the FCA's radar since 2016, it has emerged.
The Financial Conduct Authority (FCA) first contacted Active Wealth regarding British Steel transfers on 16 November 2017. However, a letter sent from managing director Darren Reynolds to Work & Pensions Select Committee chair Frank Field has revealed the watchdog has been keeping tabs on the firm since August 2016.
According to the letter, that was when the FCA requested information that included an outline of the firm's advice and sales procedures and monitoring arrangements in relation to pension transfers and/or switches, including a flowchart of the whole advisory process.
The company was also asked to provide six specific client files. The firm received no feedback from the FCA on this occasion.
Then, on 5 January 2017, the FCA requested a further six client files and an outline of the firm's procedures and monitoring arrangements, including a flow chart of the advisory process specific to switching pension arrangements into SIPPs.
Following that, on 13 February 2017, the regulator asked for details of the underlying investments for the six clients whose files were submitted on 19 January 2017. The FCA also asked who selected the funds clients were invested into and copies of the information provided to each client.
The FCA visited Active Wealth on 17 and 18 July last year and, following the visit, the firm confirmed it would not recommend any non-standard assets to its clients.
Frank Field was unimpressed by the reaction time of the regulator. "I have already described the FCA's action on BSPS as grossly inadequate, and these responses do nothing to increase my estimation," he said.
"The FSA was reformed and renamed amid concerns it was too close to the financial businesses it was supposed to regulate. From their intervention in this affair, it seems clear the FCA's actions still effectively protect these businesses' ability to make money out of pension funds, rather than protecting pension savers.
"They must take care they are not sleepwalking into yet another huge misselling scandal."
Highest transfer value £790,404
The letter from Reynolds also revealed the highest transfer value of a BSPS client with the firm was £790,404, and the average £398,347. The highest fee Active Wealth received in respect of BSPS clients was £1,500, while the average fee was £1,443.
Active Wealth has been accused of giving poor advice to steelworkers throughout the course of the British Steel Pension Scheme saga, and has since voluntarily suspended undertaking DB transfers following a visit from the FCA.
On 13 December 2017, Reynolds did not turn up to a Work and Pensions Committee hearing on British steelworkers' pensions to which he had been summoned.
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