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PFS defends advice sector against Work and Pensions Select Committee report

25 February 2018

The Personal Finance Society has defended advisers in the wake of the Work and Pensions Select Committee’s damning report on the British Steel pension scheme.

The Committee said it had worrying evidence that BSPS members had been exploited for “cynical personal gain by dubious financial advisers,” and the report details how BSPS members were “shamelessly bamboozled” into signing up to ongoing adviser fees and unsuitable funds.

However, PFS chief executive Keith Richards (pictured) said the Committee must be mindful of the underlying root cause of the problem, with thousands of British Steel workers forced into making “unqualified and very emotional decisions within a completely unreasonable deadline.”

In response to the findings of the report, he said: “Regrettably, due to the spurious actions of a few unregulated introducer firms, we are now seeing the blame and responsibility being disproportionately placed upon the advice sector – which is not in the public’s best interest.”

Richards said all BSPS transfers would now come under the spotlight, running the risk of placing genuine advisers under suspicion of wrong-doing.

“Poor practice and over-commercial activity will always be unacceptable and there is no defence for any firm which has compromised professional standards because they saw the pension reforms as a quick money-making opportunity.

“But spare a thought for the majority of genuine advisers who are being unfairly implicated in this mess and who themselves may now become victims of the fiasco,” he commented.

Richards went on to point out that the greater degree of responsibility sits with the scheme trustees, the employer and The Pensions Regulator, who he believes mismanaged the matter from the very beginning.

“It is relatively easy for the Work and Pensions Select Committee to apportion blame after the event – but where were they when it came to having a bit of foresight to help mitigate these inevitable unintended consequences? They seem hastily intent on becoming judge, jury and executioner now that this has happened.

“It is extremely disappointing that the authorities and the government are not taking a more responsible role and accepting their fair share of accountability for what many warned would happen. Meanwhile, everyone else will be blamed, which is unacceptable and will do little to engender public confidence.

“Professional advice was mandated for good reason and the advice profession continues to play a vital role. It must be remembered that there is substantial evidence that those who receive professional advice are better off as a result. There is no reason why this should not apply to the vast majority of cases here,” he added.