Though it reveals little new, Frank Field’s report into what happened  in the British Steel Pension Scheme is nothing if not a good read.

But we shouldn’t allow headlines about sausage ‘n’ chips suppers and factory-gate skulduggery to get in the way of the report’s conclusions and recommendations.

This was a serious inquiry that has thrown up some important messages.

• Even as good a pension as the British Steel needs a sponsor; without the support of TATA, this scheme’s natural home was the PPF which is where it went.
• Giving people a choice of lifeboats was for a substantial minority of steelworkers for themselves, they’d have swum for themselves – pretty well no matter what.
• The job of protecting such people from the worst consequences of an emotional and irrational decision was simply not done; either by the Trustees or advisers.
• This was out of a misjudgement by the Trustees and out of opportunism amongst a small band of entrepreneurial advisers (who I bet now wished they hadn’t got involved).

My part in all this is rather over-represented in the report, as I have the gift of the gab and am quotable. But I am pleased that I and Al Rush and Rich, Stefan and David, were able to highlight the systemic problems with transfer advice in the UK today

1. That where demand is strong (there were over 15,000 CETV quotations in circulation out of a transferrable population of 43,000) , then advice tends to be commoditised. Stories of advisers doing 7 transfers in a day abound.
2. That the new kind of SIPP (see diagram below) has allowed some advisers to subvert the RDR and get paid via the back door. There is nothing illegal about these SIPP structures, but they do the same financial vandalism as scams.
3. That where demand is so strong, a feeding frenzy will emerge and that Port Talbot was entirely predictable (indeed I predicted it in August to a group of BSPS Trustees and their advisers).

Having been an IFA in the 1980s and 1990s, I totally understand both the good and bad advisers I have been in contact with. The Pension Freedoms are a side issue in this. What created the feeding frenzy ,was not the capacity to spend the money when they liked (only 4% of members in an early poll wanted to control their money themselves), it was the telephone numbers , the financial and emotional response to Tata’s covenant and the failure on everybody’s part to explain why transfer values are so high.

One person I spoke to explained that they thought the transfer value for their £30,000 pa prospective pension would be £30,000. It turned out to be over £700,000. Can you blame that person being amazed?

What added fuel to the fire was a perception that TATA and the Trustees were acting in unison to prevent transfers. While Time To Choose talked of BSPS2 and PPF, the steelworkers talked of lifeboat v transfer. The Trustees and their members weren’t having the same conversation.

I’m now finding myself talking to the Trustees and managers of other large pension schemes and it turns out (surprise surprise) that they have their own Port Talbots. Indeed some of the advisory firms “volunteering” not to advise steelworkers are also causing “de-authorisation issues” for other schemes.

Port Talbot has changed the landscape;

• 9 firms have removed themselves from the transfer market
• 1 firm (Active Wealth) has gone into liquidation
• The FCA’s sampling suggests that in 53% of cases where transfer advice given the advice was either iffy or downright dodgy
• As a result, all transfer advisers can expect the “inspector to call” in 2018
• and the Pensions Regulator and FCA have agreed to establish a joint pensions strategy.

I hope that we will see in 2018, a diminishment- if not the end- of conditional pricing, the practice of only charging a client if they don’t go ahead with the transfer recommendation

I hope we will see an investigation into advised SIPPs as part of the platform review

I hope that the FCA will weed out the IFAs who have the qualifications but not the integrity, needed to help people in this most difficult area of financial advice

And I think that those, like me who advise trustees, will recognise we hold a part of the blame. We are supposed to be able to look at the future and predict things with help of data from the past. I could tell, as a former adviser, where things were heading , but it looks like the better qualified advisers talking with the trustees – couldn’t. They shouldn’t be able to walk away from the consequences of Port Talbot (even if they don’t know where Port Talbot is).

If you want to hear me spout some of this on Radio 4’s today program, the link’s here (minute 1.17)