The Financial Services Compensation Scheme has launched an investigation into Newport-based Prism Independent Financial Advisers Ltd (FRN: 515431).

The FSCS is investigating whether Prism was involved in regulated activities that may give rise to valid claims.

Prism is one of the advice firm associated with claims connected to the British Steel Pension Scheme (BSPS).

The FSCS was unable to share claims figures as Prism has not yet been declared in default.

In 2017, many British Steel workers were advised to transfer out of their defined benefit pension into a defined contribution pension such as a Personal Pension Plan or a Self-Invested Personal Pension (SIPP).

The FSCS said that by transferring to a private pension arrangement, they would have lost the benefits already built up in the British Steel Pension Scheme and that it may not have been realistic to achieve the same level of benefits from their new plan.

The firm was based in Newport, Gwent and ceased to be authorised after 23 September 2020 when the firm entered a solvent liquidation (members' voluntary liquidation). It was a regulated firm and was authorised from 2009.

The firm recently converted to a creditors' voluntary liquidation, an insolvency process which satisfies the first condition for FSCS declaring a default – that the firm will not be able to meet the costs of any claims itself. This means the FSCS is now investigating individual claims and if a valid one is identified the firm can be declared in default. 

The FSCS is encouraging anyone who may have valid claims against the firm to come forward.

Several financial advice firms have found themselves caught up in the BSPS scandal.

Last month the FSCS launched an investigation into Chester-based pension adviser Arrow Financial Services UK Ltd, trading as Arrow Asset Management (FRN 528826).

Earlier this month the FCA censured Quilter-owned Lighthouse Advisory Services Limited for serious advice failings in relation to the British Steel Pension Scheme which resulted in £23m paid in redress to clients, some of them pension transfer clients.