British Steel  

FCA restricts advice firm over failure to pay British Steel redress

FCA restricts advice firm over failure to pay British Steel redress
(Pexels/Wendelin Jacober)

The Financial Conduct Authority has placed several restrictions on KBFS Financial Limited after concerns the firm failed to pay redress to members of the British Steel Pension Scheme.

The regulator has prevented KBFS Financial from carrying on any regulated activities and has restricted access to its assets.

FCA had concerns that the firm failed to pay redress awarded to former members of the British Steel Pension Scheme by the Financial Ombudsman Service, and that it failed to engage with the regulator in “an open and cooperative way”.

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According to the City watchdog, the firm has failed to pay redress awarded by the Fos in relation to unsuitable pension transfer advice given to five British Steel clients.

The FCA also said KBFS failed to provide it with information requested about its financial position and Fos awards it was due to pay out.

According to a first supervisory notice issued to the firm, KBFS failed to engage with the FCA for a prolonged period and the firm’s directors applied to the registrar of Companies House for striking-off and dissolution without notifying the regulator.

The notice stated: “This failure by the firm to notify the authority of such matters is particularly concerning in the context of the authority’s repeated attempts to engage the firm in relation to its concerns, and requests from its own clients and the Fos.”

Failed attempts at contact

In May 2023, the FCA sought information from the KBFS regarding its preparations for the BSPS redress scheme. 

The firm did not respond and so, in July, the FCA sent an information requirement to the firm.

The FCA’s letter explained that it was exercising statutory powers to obtain the information and explained the consequences if the firm did not respond with a reasonable excuse.

No response was received and so in July the FCA sent a reminder, but again no response was received to that either.

In September 2023, the KBFS’s director sent an email to the FCA, requesting an up-to-date redress calculator for the quarter. 

But it made no reference to the FCA’s request for information.

The FCA said this was sent to the firm in October but the firm claimed it had not received it.

The FCA stated: “As of the date of this notice, the authority has received no response from the firm to its information request or subsequent attempts to establish contact with the firm and obtain the information sought. 

“The authority notes that this is despite the firm making contact with the authority on September 26, 2023, in which the firm requested provision of a redress calculator, and despite the authority also establishing contact with an individual connected to the firm’s director who indicated that they would seek to bring the matter to the firm’s director’s attention.”

amy.austin@ft.com