Founder of advice firm Echelon Wealthcare, and so-called ‘pension paramedic’, Al Rush has submitted a formal complaint to Nikhil Rathi, chief executive of the Financial Conduct Authority (FCA), about the role the regulator played in the British Steel Pension Scheme (BSPS) scandal.
Rush’s letter, seen by International Adviser, was also sent on behalf of 531 steelworkers affected.
According to the IFA, the FCA’s “actions and omissions” meant thousands of steelworkers were adversely affected by the unsuitable financial advice to transfer out of the BSPS.
He said: “The thrust of my complaint is that due to internal FCA shortcomings, steelworkers have found themselves needlessly in a protracted and calamitous situation not only not of their choosing, but one which was avoidable and preventable in the first place.
“They have suffered financial loss and stress that no steelworker should have to bear. I accept that the FCA did not create the scandal of BSPS, but despite having the opportunity, the capability, and dare I say it, the genuine intent from many individual employees to help, its corporate behaviour contributed and aggravated the factors which not only allowed it to happen in the first instance, but then for the impact to worsen.
“While the FCA was meeting with BSPS campaigners as far back as 2017, you knew you were presiding over a process that was already unfit for purpose and responsible for the emerging carnage. But still you obfuscated and subordinated the needs of steelworkers to career and corporate self-preservation.”
Not an isolated case
Rush’s complaint, however, does not stop at the BSPS case.
He believes British Steel was not a one-off issue and that several scandals – such as London Capital & Finance, Keydata, Blackmore, Connaught, Libor, and the Banking Swaps among the ones he named – show that the “problems with the FCA are not new”.
Rush added: “The repeated failings of the FCA go way beyond inadvertent, understandable and forgivable shortcomings. Repeated mistakes, delays and multiple examples of bad leadership have resulted in far worse stress and financial loss for thousands of families.”
As a result, the ‘pension paramedic’ said that once he will receive a response from the FCA, he will refer the matter to the Financial Regulators Complaints Commissioner and advocate the creation of a BSPS Compensation fund “with the assistance of the Treasury, to ensure these men and women are not left out of pocket and to reflect the levels of stress they have endured”.
Rush’s complaints shortly follows a legal challenge by some pension advice firms against the regulator over the creation of the British Steel redress scheme.
Regulatory work
The FCA told IA that it could not comment on Rush’s complaint as it is being taken in consideration and before a response is given to the IFA.
A spokesperson added: “We consider each complaint made to us individually and cannot comment on the specifics of the letter at this time. However, we recognise the harm the circumstances of BSPS caused to steelworkers and communities.
“We have taken a wide range of actions in response to BSPS, starting with on the ground events for advisers in 2017 as well as engaging directly with consumers over the last few years. Over £20m ($24.7m, €22.7m) of redress has been paid out by firms due to the action the FCA has taken, and in November [2022] we confirmed our plans for a consumer redress scheme, paid for by firms, specifically targeted at helping those consumers who haven’t yet complained to have their case reviewed and have redress paid where it is owed.
“We have also implemented changes in how we work with other organisations in this area to share information and intelligence. We’ve also acted to raise the standard of pension transfer advice more generally – by introducing new rules, as well as working with our partners to ensure that consumers are supported to make decisions about their pension.
“We have said previously that we have learnt lessons, both for how we operate as a regulator, and for how the wider pensions regulatory system serves to protect consumers.”
