The Work & Pensions Select Committee BSPS report recently castigated “dubious” advisers and introducers for giving appalling advice to some BSPS pension transfer clients.
The PFS says in response to the Work and Pensions Select Committee BSPS report that the debacle now risks hitting the good name of all financial advisers and says “a more balanced and objective review is required to ensure the public are not dis-served by reckless statements.”
PFS chief executive Keith Richards said: “The committee must not ignore the underlying root cause of the problems faced by thousands of British Steel workers, who were forced into making unqualified and very emotional decisions within a completely unreasonable deadline.”
“Regrettably, due to the spurious actions of a few unregulated introducer firms, we are now seeing the blame and responsibility being disproportionately placed upon the advice sector - which is not in the public’s best interest,” added.
Mr Richard continued: “Sadly, all British Steel pension scheme transfers will now come under scrutiny and genuine advisers will also fall under suspicion of doing the wrong thing. As a result, there is a growing risk of wider implications for any DB transfer.
“Poor practice and over-commercial activity will always be unacceptable and there is no defence for any firm which has compromised professional standards because they saw the pension reforms as a quick money-making opportunity. But spare a thought for the majority of genuine advisers who are being unfairly implicated in this mess and who themselves may now become victims of the fiasco.”
Mr Richards said while the whole advice sector is tarnished “the greater degree of responsibility sits with the scheme trustees, the employer and indeed The Pensions Regulator, who appear to have mismanaged the matter from the outset.”
Mr Richards said it appeared that little consultation or guidance appeared to have been provided to the workers. There also appeared to be a lack of market capacity to advise scheme members within the limited timeframe.
He believes that while it is easy to be wise in hindsight more foresight and planning and support was “blindingly obvious.”
He said the pension freedoms introduced by the government had also paved the way for BSPS workers to transfer their pensions too easily and government had to shoulder its share of the responsibility.
The Work and Pensions Select Committee was apportioning blame after the event but, “where were they when it came to having a bit of foresight to help mitigate these inevitable unintended consequences?,” he said. He said the committee was intent on becoming judge, jury and executioner.
Mr Richards said there was now a case for “calm, considered and balanced” intervention, not a frenzy of mistrust, to ensure this “disaster” is not repeated.