Recommendation 2

The Financial Conduct Authority has consistently been behind the curve in responding to the catastrophic impact on British Steel Pension Scheme members. The FCA has been slow to respond at all stages of the BSPS case, for example it failed to take effective preventative action after identifying problems with the advice market in 2015 and it has been slow to implement its regulatory powers including a ban on contingent charging and temporary asset retention restrictions. The FCA’s lack of access to timely data and insight into the DB pension transfer market indicates that the regulator was slow to understand the risks to pension members and how to effectively monitor these. This was made worse by the FCA’s focus on regulation of big firms which left smaller firms out of the spotlight, as the former Chief Executive of the FCA admitted.1 This lack of data, and requirements for high levels of evidence to inform its decisions, also led to significant delays in its response. Rather than taking immediate action, it had to gather further information to understand the issue and held consultations to justify the use of certain regulatory powers. The FCA has proved it can act fairly and swiftly in other circumstances, such as taking emergency action to protect firms and consumers during the COVID-19 pandemic. The FCA should therefore take a similar approach in cases like the BSPS, responding quickly to individual detriment and protecting consumers from further harm. Recommendation: The FCA should examine what can be done to improve the data and insight that they need to inform a more proactive approach to regulation, and what lessons can be learnt from its response to the COVID-19 pandemic. 1 Q46 Andrew Bailey 6 Investigation into the British Steel Pension Scheme