The Financial Conduct Authority has imposed full or partial restrictions on 21 advisers for poor defined benefit pensions advice in the past decade.
The FCA is on record as having said its default position on DB transfers is that it is nearly always not in the best interests of consumers. Something it has been saying since 2019.
A freedom of information request submitted by FT Adviser to the City watchdog also revealed 20 advisers have received financial penalties as a result of giving unsuitable DB advice since 2015.
This does not include individuals whom the FCA has decided to prohibit and/or fine due to poor DB advice, but those who have referred their cases to the upper tribunal.
In those cases, a final notice has not been issued, and the Upper Tribunal will determine the appropriate action for the FCA to take.
In 12 of these 20 cases, the FCA looked to maximise available redress by agreeing not to enforce the fine if the adviser paid the amount directly to the Financial Services Compensation Scheme.
This was to ease the demand on the FSCS and ensure those responsible for the wrongdoing pay redress.
British Steel
A lot of the FCA’s defined benefit enforcement cases have involved advisers who were advising British Steel clients.
Around 8,000 people transferred out of the British Steel Pension Scheme and the FCA has found almost half (46 per cent) did so after receiving unsuitable advice.
The FCA has carried out around 30 investigations into firms and individuals regarding DB transfer advice related to BSPS.
According to the FCA website, one of the largest financial penalties given to a firm totalled £2.35bn.
There have also been 126 firms who have failed with the Financial Services Compensation Scheme that are related to BSPS.
To date, the lifeboat scheme has paid out a total of £76.6mn on 2,790 claims, with 24 BSPS claims still in progress.
The Financial Ombudsman Service between April 2017 and March 2025 had received 1,800 complaints related to the British Steel Pension Scheme.
amy.austin@ft.com