An advice firm associated with the British Steel Pension Scheme (BSPS) has failed after the Financial Services Compensation Scheme received four claims.
As of yesterday (August 9), Cheshire-based Arrow Financial Services UK is now in default after it was placed under investigation by the lifeboat scheme back in April.
The FSCS said the firm, which was also trading as Arrow Asset Management, received four claims in total.
One claim has since been upheld and triggered the default.
The claims are pension transfer advice related and the FSCS also confirmed that the company is one of those associated with claims regarding BSPS.
The BSPS case
During 2017, BSPS members were asked to make decisions about their pensions as part of a restructure of the scheme.
About 8,000 members transferred out of the scheme, with transfers collectively worth about £2.8bn.
But concerns about the suitability of the transfers were soon raised, leading to an intervention from the Financial Conduct Authority that resulted in a number of advice firms – key players in the debacle – stopping their transfer advice service, while others went out of business.
The debacle created a mountain of liabilities, which lawyers believe could end up costing the industry up to £300mn.
The FCA announced last year that it plans to deliver £71.2mn in compensation to former members of the scheme who received unsuitable advice.
The scheme covers those who transferred out between May 26, 2016 and March 29, 2018.
However, in February this year a number of steelworkers wrote to the FCA expressing concerns about the regulator’s calculations for the scheme.
sonia.rach@ft.com
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