The UK financial regulator has been accused of “sleepwalking into another huge misselling scandal” by a Labour MP, after an investigation into how thousands of former steelworkers may have lost out following complex pension transfers that earned financial advisers large fees.

Frank Field, the chair of the work and pensions select committee, accused the Financial Conduct Authority of failing to protect steelworkers who were part of the British Steel Pension Scheme (BSPS) amid concerns of a “feeding frenzy” by financial advisers.

Tata was forced to offload the £15bn BSPS to pave the way for a 50-50 merger of its European operations with Germany’s ThyssenKrupp to create the second biggest steel producer in Europe after ArcelorMittal.

But more than 2,000 steelworkers subsequently transferred out of their final-salary schemes after receiving allegedly unsuitable advice.

The FCA is now broadening its probe into the pensions advice given to people leaving final salary-style pension schemes, demanding information from 45 advisory firms.

But Field suggested that regulatory action had been too slow, despite considerable warning signals. He said the FCA ordered one financial adviser, Active Wealth, to cease advising on new pension business but the move was “14 months after it first started digging, and just weeks before the original deadline for BSPS members to make a decision on their pension”.

He added that while Active Wealth was “already on their radar” the FCA first contacted the firm about pension scheme in November 2017 – two months after BBC investigators presented it with evidence they had uncovered.

Active Wealth was one of two financial adviser firms that were called to appear in front of the committee but failed to attend.

Information subsequently supplied reveals that Active Wealth handled transfers worth an average of nearly £400,000 for each steel worker, “representing upwards of £40m transferred out of BSPS on their advice alone”.

Questions remain over how much the workers paid their advisers, said Field.



“The highest and average fees paid to them so far [were] described as £1,500 and £1,443 respectively. The fees seem very small relative to the huge transfer values and it is unclear how many BSPS clients signed up to an ongoing adviser charge or what that might cost them ultimately in total.”

Field said: “From their intervention in this affair it seems clear that 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.”



A letter sent to Field by Megan Butler, the FCA’s head of supervision, promised to extend an earlier probe of 13 pension advisory firms where the evidence suggested that only half gave suitable advice.

The regulator said in a statement: “The Financial Conduct Authority wholly rejects the conclusion of the committee about our actions on BSPS. The FCA strongly believes that we have taken all the appropriate action we can within our remit on this issue.”

In its response to the committee, Active Wealth said it had fully complied with regulatory rules and that its “approach has been to act in the best interests of its clients and to provide advice which is tailored to meet the client’s investment objectives”.