The Financial Services Compensation Scheme has launched an investigation into a duo of connected Dorset financial adviser firms following advice given to members of the British Steel Pension Scheme.

Kathryn Brown (FRN: 670840) and KBFS Financial Ltd (FRN: 831504) were both placed under investigation on 9 April.

KBFS Financial had its authorisation revoked by the FCA as a result of enforcement action on 9 February. 

The company, based in Weymouth, had been regulated by the FCA since 1 July 2019. The team of three was headed by Kathryn Brown, who formerly acted as a sole trader between May 2015 and July 2019.

The FSCS advised that where customers received advice prior to 1 July 2019, the advice was likely given by the firm's Kathryn Brown (FRN: 670840) rather than KBFS Financial.

No FSCS customer claims have been upheld against either firm as yet. Both firms have been associated with claims related to the British Steel Pension Scheme.

In 2017, many British Steel workers were advised to transfer out of their defined benefit pension into a defined contribution pension.

The FCA has set up a redress scheme for people who were advised to transfer out of the BSPS pension between 26 May 2016 and 29 March 2018. 

Firms were asked to review the advice they gave, identify if it was unsuitable and calculate and pay redress to clients where the unsuitable advice caused a financial loss.

As KBFS Financial has now gone out of business, it is no longer able to continue to take part in the redress scheme. Therefore any new claims against the firm should be submitted to the FSCS.

Last month the FSCS declared five firms as failed, including Manchester-based Pension Advice Specialists Ltd (FRN: 792927).

It was the latest in a number of firms that have failed due to complaints involving pension transfer advice, including Sheffield-based Abbey Lane Financial Associates Limited (FRN 649170), which also failed in March and was linked to the BSPS scandal.

Another BSPS-linked firm was declared in default in March: Aqua Financial Services Limited of Cheadle in Cheshire.