Information on the proposed BSPS redress scheme (CP22/6) - May 2022

FOI Release Date of Release:

Reference Case Number: FOI9242

Freedom of Information: Right to know request:

I am looking for the following information relevant to the FCA's thematic and supervisory work in relation to DB pension transfers, specific to, but not limited to, the proposed BSPS redress scheme (CP22/6). The timeliness of the FCA's reply should take into account the deadlines for responses to the CP.

The information is in respect of the FCA's use of external file reviewers for assessing the suitability of regulated firms' past transfer advice. The fact that some of the questions are specific to one firm identified by the FCA in the CP (a firm which may or may not be regulated by the FCA) is not relevant to these questions as they are not about a specific firm but about the extent of the FCA's reliance on any one firm.

  1. Was Grant Thornton involved in performing the BSPS file reviews the CP evidence is based on?
  2. Were any other third parties not connected to them involved in the BSPS case reviews relied on in the CP?
  3. Were the suitability findings of i) the BSPS cases and ii) the non-BSPS cases, as differentiated in the CP, performed by different parties, rather than i) and ii) having the same party or sets of parties in common?
  4. Was Grant Thornton involved in non-BSPS file reviews that have led to action against firms in relation to their DB transfer business?
  5. Were firms affected by such action told that their file reviews had been outsourced?
  6. Was Grant Thornton involved in the production of i) the standard DBAAT form and/or ii) the manual for using the form?
  7. Was Grant Thornton involved in adapting the standard DBAAT form for use in the proposed redress scheme?
  8. Did either of the two case studies used in chapter 3 ('that we and the Financial Ombudsman Service have seen') involve at any stage a file review by Grant Thornton?'

FCA response:

  1. Was Grant Thornton involved in performing the BSPS file reviews the CP evidence is based on?

    Yes. Grant Thornton was contracted to perform file reviews on the FCA’s behalf. They reviewed 268 of the 365 files the evidence in CP22/6 is based upon. 
     

  2. Were any other third parties not connected to them involved in the BSPS case reviews relied on in the CP?

    No.
     

  3. Were the suitability findings of i) the BSPS cases and ii) the non-BSPS cases, as differentiated in the CP, performed by different parties, rather than i) and ii) having the same party or sets of parties in common?

    The file reviews that underpin our evidence on both the 46% (BSPS cases) and 17% (non-BSPS cases) were completed either internally by FCA members of staff or by Grant Thornton which was contracted to perform some file reviews on our behalf.

 

  1. Was Grant Thornton involved in non-BSPS file reviews that have led to action against firms in relation to their DB transfer business?

    Yes.

 

  1. Were firms affected by such action told that their file reviews had been outsourced?

    No. Where Grant Thornton completed the file reviews on our behalf, we used these as the basis, alongside our own supervisory judgment and visit findings for the feedback to the firms. The firms were not told that the files reviews were carried out by Grant Thornton. However, in some cases we were asked by firms ‘who completed the file reviews’ and we responded that we had engaged an external expert (where relevant).
     

  2. Was Grant Thornton involved in the production of i) the standard DBAAT form and/or ii) the manual for using the form?

    Grant Thornton was not part of the initial development or production of the DBAAT (tool or instructions). When we contracted them to carry out file reviews, they were involved in some of the later stage testing and refinement/calibration.
     

  3. Was Grant Thornton involved in adapting the standard DBAAT form for use in the proposed redress scheme?

    No. Grant Thornton was engaged to provide an independent report on the standard expected of a reasonable pension transfer specialist advising a client during the period under review. Grant Thornton’s views were taken into account in the production of the BSPS DBAAT instructions.

 

  1. Did either of the two case studies used in chapter 3 ('that we and the Financial Ombudsman Service have seen') involve at any stage a file review by Grant Thornton?'

    No. Paragraph 3.25 of CP22/6 states ‘The following 2 case studies outline typical scenarios that we and the Financial Ombudsman Service (FOS) have seen …’. Case study 1 is a fictional case study created by the FCA, based upon file reviews completed by Grant Thornton and ourselves. It is intended to illustrate a ‘typical’ BSPS member. The client circumstances do not relate to a specific individual, as data protection laws prevent us from disclosing information which may directly or indirectly identify a person. Case study 2 relates to a FOS decision (DRN3102248) so, whilst this is a real-life case assessed by the FOS, we are not aware that it relates to a specific file review carried out by Grant Thornton.