A.W.Dallas Financial Services has been forced into liquidation after receiving 35 Financial Ombudsman Service (FOS) complaints in relation to British Steel Pension Scheme (BSPS) pension transfer advice.

According to accountancy firm Menzies, which was instructed to place the firm into creditors’ voluntary liquidation earlier this month, the liability in respect of the complaints could exceed hundred of thousands of pounds if upheld.

Initially the firm’s directors hoped that the firm and its assets would be sold but whilst an offer was made, the Financial Conduct Authority blocked the sale due to directors and senior managers of both firms being the same.

According to Menzies, the FCA said it did not believe it to be appropriate for the directors to continue to benefit from customers who may have been misadvised.

As a result the company was placed into liquidation as the only other offers made were deemed to be insufficient to warrant placing the company into administration.

Menzies the FOS complaints were received in respect of advice provided to clients between August 2017 and February 2018 and constituted nearly a quarter of the firm’s client book.

John Cullen, partner at Menzies, said: “Despite owning a client list of more than 200 client accounts, the directors have been left with no other option but to instruct Menzies LLP to assist with placing the company into liquidation with immediate effect.

“We hope to complete a sale of the customer list to a third party shortly, but regrettably the value generated will not be significant.”

In 2017, many British Steel workers were advised to transfer out of their defined benefit pension into a defined contribution pension, typically a Personal Pension Plan or a Self-Invested Personal Pension (SIPP).

It was one of three choices available to British Steel Pensions Scheme (BSPS) members. The others were the new scheme (BSPS2) and Pension Protection Fund (PPF).

The British Steel Pension Scheme was restructured in 2018.

When British Steel decided to encourage workers to consider moving their pension a number of advice firms moved in but poor advice was widespread and the scandal attracted national media attention with a number of Financial Planners helping victims on a pro bono basis and leading MPs getting involved.

The Financial Services Compensation Scheme (FSCS) found that the returns needed by the former BSPS members’ new pensions were “unrealistic” to match the benefits offered by the BSPS2 or the PPF and the customers would have been better off if they had not transferred to a private plan.

The FSCS added that even if those that transferred have not lost money - the terms, exclusions and complexities involved in a DB transfer may not have been adequately explained.

By transferring to a private pension arrangement, they would also have lost the benefits already built up in the BSPS. The advice they received may not have been the best advice for them, said the FSCS.