Forty financial advice firms hit by BSPS claims have so far failed with a further seven under investigation, latest FSCS data shows.

Claims relating to the 40 advice firms which went out of business before 28 February are now being handled by the Financial Services Compensation.

Compensation costs are expected to run into the millions as many of the advice firms have failed.

Many advisers connected to BSPS failed firms have been banned or fined or both. 

BSPS claims arise from members of the British Steel Pension Scheme who were advised by the advice firms to transfer their pensions to another provider. In many cases the advice was poor or misleading, the FCA has said.

The news comes as FCA data suggests unsolicited approaches to individuals to transfer their pensions have dropped sharply in the past two years.

Analysis by consultancy Broadstone, based on analysis of the FCA’s Financial Lives Survey, reveals that a fifth (20%) of adults experienced a pension-related unsolicited approach in the previous 12 months in 2017, however this dropped to 16% in 2020 before falling further to 7% in 2022. It means the proportion of adults reporting a recent potentially fraudulent approach about their pension savings has fallen by 6.5 million from around 10.2 million in 2017 to 3.7 million in 2022, Broadstone says.

BSPS claims are continuing to be received by the FSCS, with Scottish financial adviser firm MLM Wealth Management Limited (trading as MLM Financial Services / FRN 784277) declared as failed by the FSCS last week after two BSPS claims were placed under investigation. The FSCS declared seven adviser and Financial Planning firms as failed in June and July, including two with BSPS claims.

In 2021 the government set up a BSPS redress scheme, administered by the FCA, to help BSPS members seeking compensation and help.

Below are lists of firms with BSPS claims that went out of business before 28 February this year or which are under investigation since February.

Firms that went out of business before 28 February 2023

Source: FSCS