The Financial Services Compensation Scheme (FSCS) has declared three financial advice firms in default, all of which advised on British Steel transfers.
One of the three failed advice firms, West Wales Financial Services Ltd, trading as IWA Financial Solutions, and Mike Powell Mortgages, was ordered to cease advising on investments and pensions without prior consent from the Financial Conduct Authority (FCA) in May 2021.
Another firm the FSCS declared in default that was associated with British Steel Pension Scheme (BSPS) transfers was A. W. Dallas Financial Services Ltd, trading as Portfolio Pension Consultancy.
The third firm was Fortuna Wealth Management. In August 2019 the firm lost permissions after being accused by the FCA of placing clients into high-risk bonds and charging fees without providing any service. Founder Andrew Deeney set up Fortuna WM in June 2017 when he still worked at adviser firm Active Wealth UK.
Active Wealth UK became known among the industry for poorly advising British Steel workers who transferred out of their defined benefit pension, working alongside unregulated introducer firm Celtic Wealth Management. Active Wealth UK ultimately entered liquidation in February 2018 and has since cost the Financial Services Compensation Scheme more than £1m.
In 2017, around 8,000 British Steel workers were advised to transfer their benefits away from the company's defined benefit (DB) scheme, most on the advice of independent financial advisers. Around 900 of those transfers were arranged by firms that later had their permissions revoked by the FCA.
In March earlier this year, the FSCS declared two other financial advice firms in default that advised on transfers away from the BSPS.
Earlier this month financial advisers were told they could expect a maximum £240m regulatory bill for the next financial year for the third year in a row as the FSCS forecasted an overall levy of £900m for 2022/23.