The decision by the Financial Conduct Authority (FCA) to invokeemergency powersto stop financial advisers involved in the British Steel Pension Scheme (BSPS) mis-selling scandal from offloading their assets to avoid paying compensation has received a mixed response in the City.
The Financial Conduct Authority (FCA) has launched the emergency asset restriction rules without consultation, in a bid to stop firms from wiggling out of victims’ hard-won redress.
Firms will have to abide by the rules, which will be introduced on Wednesday, until they confirm that they have sufficient resources to pay their potential compensation bill.
Commenting on the FCA’s move, Alessio Ianiello, a leading mis-selling lawyer at Keller Lenkner UK, told City A.M. this morning that “the FCA should have invoked the emergency powers when news of the BSPS scandal was first published back in 2017, not some five years after the event.”
Members of the troubled BSPS scheme were told they wereentitled to over £71m in financial compensation, at the end of last month, after years of campaigning.
FCA uses emergency powers to stop British Steel Pension scandal advisers selling assets
The FCS, which launched a probe for a redress scheme in late December, has found that almost half (46%) of the advice given to members of the scheme was unsuitable.
The 2017 scandal involved 7,700 BSPS members receiving advice to take their funds out of the pensions scheme – which they took and lost “significant sums of money as a result,” the NAO said in a statement at the time.
“The FCA’s delay to invoke these powers is a disservice to claimants affected by the scandal,” Ianiello said. “Especially those where the original advisory firm has been declared in as a result of the defendant firm having swindled their assets out of the business,”
“This delay will also have a long term impact on the Financial Services Compensation Scheme which is responsible for covering claims against advisors that have already defaulted.”
“If the FCA is serious about this intervention, it should widen the emergency powers to firms that have advised one or more BSPS members to transfer out of the pension scheme, otherwise, some claimants will be left in the cold,” Ianiello concluded.
FCA orders challenger banks to stop cutting corners in combating money laundering
Share this article
Subscribe to the City A.M. newsletter to have our top stories delivered directly to your inbox.
Follow us for breaking news and latest updates