The FCA says that 47% of the DB pension transfer advice given to members of the British Steel Pension Scheme was ’unsuitable’ with only 21% ’suitable.’

It will write to 7,700 members of the BSPS scheme who transferred out to advise them how to complain if they have concerns.

FCA figures suggest 79% of advice given to BSPS members was unsuitable or had key information gaps.

The watchdog said of the 192 instances of advice given to former BSPS, 21% appeared to be suitable but 47% appeared to be unsuitable and 32% appeared to contain ‘information gaps.’ 

The FCA said the percentage of BSPS transfer advice deemed unsuitable was higher than the DB transfer market as a whole.

The FCA said that for the whole DB transfer market figures for 2018 suggested that approximately 60% of advice was suitable, with only 40% unsuitable. It added that in years prior to 2018 overall DB transfer advice may have been unsuitable in 47% of cases with some improvement in the quality of advice seen in recent years.

As part of its DB pension transfer review published today the FCA collected data from more than 3,000 firms. It provided detailed feedback to over 1,600 firms and 700 have now given up their permission to provide pension transfer advice.

The FCA will ban most, but not all, DB transfer contingent charging as a result of the review, it announced today. There will be a limited go ahead on DB transfers for pension savers with low incomes who cannot afford to pay for advice.

Many of the BSPS transfer victims took contingent advice from advice firms which have now collapsed.

In terms of the British Steel Pension Scheme, where many members were targeted by aggressive advice firms persuading them to transfer, the FCA says it found that the percentage of unsuitable files was “higher” than those in the rest of the 3,000 firm sample. 

The FCA has taken action to help those who transferred out of the British Steel Scheme, including writing to almost 4,000 former scheme members advising them how to complain, and holding events in Port Talbot, Wales.

The FCA will also write directly to all 7,700 former members of BSPS for whom contact details are available, who transferred out. This will help them “revisit the advice they received, and to complain if they have concerns.”