FSCS has updated its approach to claims against Active Wealth (UK) Limited to ensure “full and fair” compensation for former members of the British Steel Pension Scheme (BSPS), following meetings with the steelworkers, their representatives and MPs.
Active Wealth and other independent financial advisers wrongly advised British Steel workers to transfer their pension from its DB scheme into SIPPs holding other investments.
Last year FSCS declared Active Wealth in default, as it was unable to pay claims against it, and FSCS has paid around £1.1m in compensation to former Active Wealth clients, including former BSPS members.
To compensate for the value of retirement savings lost as a result of the mis-selling, FSCS will compensate for the up-front cost of professional advice on re-investment options for those members who remain in the SIPP.
Furthermore, it will revisit the values of the retained investments to ensure that an up to date transfer value is used in its calculations to provide fair compensation to former BSPS members.
FSCS were also asked to consider compensating for ongoing adviser charges, but decided against changing its approach as it is not in its remit to “compensate for the costs of future investments and any advice charges associated with them.”
Commenting, FSCS CEO, Mark Neale said: “We have strong sympathy for the plight of the members of the defined benefit pension schemes who were badly let down by Active Wealth and other advisers.
“We want to achieve fair compensation for them and hope these changes to our approach will go some way to helping them get back on track.
“We are also keen to hear from any BSPS member advised by Active Wealth who has yet to make a claim to FSCS – we are a free service to consumers, and stand ready to help.”