In short, the RAA with its 'Time to Choose' [document] was an accident waiting to happen.
There are clearly lessons to be learned for the Pensions Regulator. I hope the NAO review of the FCA’s handling of BSPS , will look at the potential for conflicts in the setting up of the RAA which extend to scheme and corporate advisers.
With regards to IFAs, lessons are being learned the hard way.
FTA: What sort of warning signs were there that should have been paid attention to in 2017? Are we going to be able to recognise these now?
HT: The steelworkers looked for help and invited a number of “experts”, including myself, John Ralfe and Al Rush into their online discussion groups. Between April and October 2017.
We saw how confidence in the sponsor of BSPS fell away and how many steelworkers were actively looking for a way out of BSPS.
I made representations to the Trustees about the likely deluge of transfer requests, but we were told that there was no history of transfers from the scheme. Relying on historic confidence of members at a time of unprecedented stress on their livelihoods was not a good idea.
The lesson to learn is for trustees to listen to what members are saying.
FTA: How can advisers spot red flags or potential problems with old portfolios when taking on new clients?
HT: I would encourage due diligence to focus on the quality of the documentation of advice given, the integration of advice and wealth management and the quality of the wealth management solutions on offer.
When people are facing huge financial changes - such as potential redundancy or changes to their pension scheme - what should the trustees, unions, employers, scheme managers and others be doing to ensure members get proper access to the best advice?
It is hard to quantify the disruption and worry to steelworkers having to choose between a pension presented as being paid from the PPF and one paid from a new scheme.
But it is easy to see the consequences. Management should not have burdened members with difficult financial choices at such an emotive time.
To date the blame has been placed on rogue IFAs who have not had the means to provide redress for woeful advice (both to transfer and on subsequent investments). Many of these advisers have folded and their PI policies have lapsed.
