A pair of MPs have today accused the Financial Conduct Authority (FCA) of being “unfit for purpose” over its inability to help wronged consumers.
Labour MPs Stephen Kinnock and Nick Smith wrote to new FCA boss Nikhil Rathi today to accuse the organisation of being “characterised by organisational drift and bureaucratic inertia.”
The pair represent constituents working for British Steel that lost life savings after “bad actor” advisors told them to transfer out of the company’s pension scheme.
Kinnock and Smith accused the FCA “delay and inaction” as it was unable to help the more than 7,000 British Steel workers who lost almost £400m from the dodgy advice.
“Despite our multiple and ongoing attempts to prompt action, the FCA continues to be City facing and lacks sufficient vision to tackle the issues facing consumers,” the pair wrote.
“Time is running out for the victims of this scandal, and it is now vital that the FCA use the full strength of its powers to take widespread action.”
Advisors were paid £3,500 per British Steel worker they transferred off the company’s pension account, with a further £6,000 for every year each worker stayed with the new investment.
Smith and Kinnock described the advisers steering the steelworkers into bad investments as “pensions sharks”.
Chris Cook, a steelworker involved in the swindle, told the Evening Standard: “The regulators have let us down completely. If I had done my job as as competently as them I’d be sacked.
“The pension regulator should have been with the trustee [of the British Steel pension scheme] asking why so many people were pulling their pensions out of the scheme. They did nothing.”
An FCA spokesperson said: ““We have undertaken a number of actions designed to help those who transferred out of the British Steel Pension Scheme. This includes writing to 7,700 former BSPS members to help them revisit the advice they received, and to complain if they have concerns. We have also held events in Port Talbot.
“We have several investigations ongoing into the advice that was given at the time. We have banned contingent charging in most circumstances to remove the conflicts of interest which arise where a financial adviser only gets paid if a transfer goes ahead.”