The Financial Services Compensation Scheme has declared British Steel-linked firm Green Gem Financial Ltd in default over pension transfer advice.
According to the FCA register the Birmingham-based firm has not been authorised since December 2023.
The firm subsequently went into liquidation in March 2024 with Roderick Graham Butcher appointed as voluntary liquidator.
The FSCS told FT Adviser it had received four claims in total so far relating to pension transfers with one upheld.
It also confirmed Green Gem Financial was one of the companies associated with claims regarding the British Steel pension scheme.
In 2017, many British Steel workers were advised to transfer out of their defined benefit pension into a defined contribution pension, known as a personal pension plan or a Sipp.
The FSCS said: “By transferring to a private pension arrangement, they would have lost the benefits already built up in the British Steel pension scheme. It may not have been realistic to achieve the same level of benefits from their new plan.
“The advice they received may not have been the best advice for them.”
This comes after a report published last month (July 2024) by the FCA, revealed the regulator alongside the Fos and FSCS, offered a total of £106mn in redress to 1,870 former British Steel pension scheme members, although its redress scheme paid out less than expected.
According to the FCA, because of “changing economic conditions”, money paid out under its redress scheme (£8.7mn) was lower than its £50mn estimate.
It estimated 1,744 former members received unsuitable advice but were not offered a redress payment because they had not lost out financially as a result of the unsuitable advice.
A total of 360 former members were offered redress comprising £3.8mn offered by firms and around £5mn offered by the FSCS.
alina.khan@ft.com
