Advice giant Quilter has set aside £24m to compensate British Steel workers advised to transfer out of their defined benefit (DB) pensions by Lighthouse, doubling its previous redress provisions.
In its half year results released on Tuesday morning (11 August), Quilter revealed it had increased the provision set aside for potential claims against Lighthouse, up from £12m it previously set aside.
Quilter's previous £12m provision was related to approximately 30 British Steel complaints received in the first quarter of 2020. Today's results revealed the advice giant has received around 30 additional complaints, bringing the total number of complaints against Lighthouse to around 60.
The new larger redress provision has been extended to include all 266 British Steel transfers made by Lighthouse.
Quilter bought Lighthouse Group in June last year bringing an additional 390 advisers to the firm's growing adviser operation. However, an affinity deal between Lighthouse and the steelworkers' union resulted in hundreds of DB transfers, which are now being re-examined.
Lighthouse is currently facing an enforcement investigation, which arose from concerns identified during its ongoing work into DB transfer advice.
The Financial Conduct Authority (FCA) is currently investigating whether Lighthouse breached certain regulatory requirements in connection with advising on and arranging DB pension transfers between 1 April 2015 and 30 April 2019.
Last year Professional Pensions' sister titleProfessional Adviser revealed four Lighthouse advisers were based at British Steel plants - two at Scunthorpe and two at Teesside - as a result of the affinity partnership between Lighthouse and Unite.
PA then went on to reveal Quilter was facing more than 40 complaints relating to advice given to British Steel workers by Lighthouse and an adviser from Quilter FP.
The majority of the claims related to advice given by Lighthouse, while some stemmed from advice given by Quilter adviser Daniel Thomas, who the network terminated on 20 September 2019 because he had not been following its advice processes correctly.
PA understands Quilter knew Lighthouse had advised steelworkers before it bought Lighthouse, however it had no knowledge of any problems with the advice given to the men.
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