PIMFA, the trade association for wealth management, investment services and the personal investment and financial advice industry, has welcomed the publication of the Financial Conduct Authority’s (FCA) policy statement regarding compensation for those enrolled in the British Steel Pension Scheme (BSPS).
But PIMFA remains concerned about the total cost of the proposed compensation scheme and construction of the proposed tool to assess the adequacy of the advice provided in the past.
Simon Harrington, Head of Public Affairs at PIMFA, comments: “The publication of this policy statement should provide welcome clarity for those who were wrongly advised to transfer out their guaranteed benefits. It is right that those people are compensated and are given clear routes to ensuring they are done so in an efficient manner. We think this policy statement broadly achieves that.
“While clarity for consumers is important, we anticipate that a number of firms will be left uncertain of their exposure to this scheme. It is regrettable that the Financial Conduct Authority (FCA) has not addressed valid concerns that have been raised by the industry generally. Those concerns centre on the construction of the Defined Benefit Advice Assessment Tool (DBAAT) and the ability of Financial Ombudsman Service (FOS) to adequately adjudicate cases in a manner which gives due consideration to the technicalities and intricacies of pension transfer advice.
“We also continue to retain concerns that the total cost of the scheme – and associated claims upheld once advice has been found to be suitable by the firms – will be significantly higher than set out in the FCA’s revised cost benefit analysis. We would encourage the FCA to report against this in order to inform future cost benefit analyses and stress test the assumptions they currently have on this market in particular.”