The sorry tale of redress for the miss-sold steelworkers continues.

Case study one – more de-risking that went wrong

David Stock & Co, an IFA was apprehended  offering restitution of £50 six years after mis-advising a steel man to opt-out of BSPS.

The regulator said on 19 May that the “unsolicited settlement offers” were not calculated in line with guidance” and were “a deliberate attempt to exclude former BSPS members from the redress scheme”.

The scheme, which launched in February, pays out former members of the collapsed scheme compensation of £45,000 on average.

Case study two – the case of the vanishing PI insurer

Ray Adam, whose Niche IFA business was known to millions of motorists as they drove past Newport on the M4, has had to liquidate his business , faced with mounting claims for redress.

My understand is that the business retained its Professional Indemnity Insurance to the end. Why did the numerous triggers sent to the insurers not trigger claims that would have paid out to steelworkers on the old terms (before discount rates rose and redress fell)? Why are claims now going to be against FSCS , the tax payers and other advisers when they Ray’s business was insured. Just what has to happen to bet a claim paid by the insurers?

My thoughts are with Ray, who I met in 2017 when he was closing his doors for over-demand from steelworkers. Ray was and is an innovator, the inventor of CashCalc, a cashflow modeler used by many advisers. He and his clients seem to have been ill-served.

Case study three ; – Time to Choose is back

We are an industry of short memories, this time 6 years ago, we were preparing to give steelworkers impossible choices between BSPS II and the PPF.  Thousands chose an easier option, a cash equivalent transfer value, nearly half of them chose for the wrong reason, following advice that is now requiring redress.

Today, those steelworkers are being asked to choose again.

The calculation on what is due will – according to this adviser take 7 months to make, giving the adviser plenty of discretion as to what discount rate to choose. This gives a new twist to the “Time to Choose” saga. All the cards appear to be in the adviser’s hands.

For many steelworkers who have already had a redress calculation from FOS, the option to have a re-calculation is now another choice it’s time to make. Thanks to Rich Caddy for this explanation

Some members received an Ombudsman decision suggesting that the member would have opted to join the PPF and to calculate compensation on this basis, but then to recalculate and pay the difference once the terms of the buyout were known.

The factors of the buyout (PIC) are now included with the FCA BSPS calculator so if you are one of the members this concerns then it’s worth contacting either your FOS investigator or solicitor to request that the redress is now recalculated using the BSPS specific calculator.

Al Rush has had to write to the Financial Ombudsman Service to explain that these choices are not as easy for steelworkers as for FCA/FOS/MaPS and the advisers.

Thankfully, and unlike the first time to choose, there appears to be some sympathy for the plight of those who have had choice thrust upon them. This is a timely reply.

The sad truth is that even the Government’s own staff don’t know how to use the redress calculator. As I’ve reported previously, they are undergoing training – even they can’t use the redress calculator (yet).

The situation is awful. Steelworkers are subject to more long delays, are being asked to make impossibly difficult choices and being told they can do all this without legal or advisory support.

Case study four – an offer of restoration

While all this is going on, I understand that an offer has been made to return those impacted  who want a pension from an occupational scheme, an offer. I don’t know the terms of the offer or if they’ll be attractive but I hope that TPR will hurry up and decide whether such an offer can be made.

The previous transfer mis-selling scandal, that took place last century, did offer redress to pension schemes at the expense of those who had profited from the advice to take DB transfers. This is clearly a well-trodden route and while I doubt that like for like restitution can be made (not least because six years of investment gains/losses and pot withdrawals have taken place), but it is encouraging that the private sector is looking to help.

“Don’t look a gift-horse in the mouth” is my advice to TPR and others involved in this protracted process. TPR  yesterday  vowed to innovate let’s see the color of its innovation!

Saints or sinners?

Steelworkers are a patient lot, but the problems that are assailing them today – when redress should be at hand – are enough to tax the patience of a saint. Steelworkers may or may not be saints – but they don’t deserve to be treated as sinners.