FCA censures Lighthouse Advisory Services for 'serious failings' in relation to British Steel Pension Scheme

Steelworkers were wrongly advised to transfer out of their valuable guaranteed pensions by an advisory services firm, the Financial Conduct Authority (FCA) has ruled.
By Greg Wright
Published 15th May 2023, 11:44 BST

The FCA has censured Lighthouse Advisory Services Limited for the unsuitable advice given to people looking to transfer out of defined benefit pension schemes, including members of the British Steel Pension Scheme (BSPS). Between 2015 and 2019, Lighthouse advised 1,567 customers, 262 of whom were members of the BSPS. Quilter Financial Planning Limited acquired Lighthouse in June 2019, after the unsuitable advice. Quilter has taken responsibility for the unsuitable advice provided before its purchase of Lighthouse and has proactively carried out a redress exercise, the FCA said in a statement.

The statement added: “By April 30 2023, Quilter had paid approximately £23.17m in redress to put affected Lighthouse customers back in the financial position they would have been in were it not been for Lighthouse’s unsuitable advice. A further £0.44 million has been offered to affected customers. This is far in excess of the fees Lighthouse received for the unsuitable advice.

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“Lighthouse had two advisers partially based on site at the British Steel works in Scunthorpe. Many of those Lighthouse advised were relying on their BSPS pension as their main source of retirement income. Many were in a vulnerable position due to uncertainty around the scheme.”

The FCA has censured Lighthouse Advisory Services Limited for 'serious failings' in relation to the British Steel Pension SchemeThe FCA has censured Lighthouse Advisory Services Limited for 'serious failings' in relation to the British Steel Pension Scheme
The FCA has censured Lighthouse Advisory Services Limited for 'serious failings' in relation to the British Steel Pension Scheme

Therese Chambers, Executive Director of Enforcement and Market Oversight, said: “Many consumers were wrongly advised by Lighthouse to transfer out of their valuable guaranteed pensions. Given the vulnerable position of consumers transferring out of the British Steel Pension Scheme, the firm should have taken real care in providing advice- it failed to do so. Quilter deserves full credit for taking responsibility for unsuitable advice given before they bought Lighthouse and for the proactive way in which they’ve worked with the FCA to put it right.”

Quilter provided very high levels of cooperation to the FCA during the investigation, the statement added. Together with its proactive redress exercise, the FCA considers a censure to be the appropriate outcome.

It added: “Since Quilter acquired Lighthouse, Quilter has replaced Lighthouse’s senior management team and its internal processes in relation to defined benefit transfer advice.​​​​​​​​​​​​​​​​​​​​​”​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​​