PIA members threatened over pensions review

The Personal Investment Authority, the financial services regulator, is poised to mount a crackdown on thousands of its members if they fail to meet a new end-of-year target for resolving the pensions compensation scandal.

Among the measures being considered is the barring of independent financial advisers from working in the financial services industry. Life companies, whose directors cannot be banned in the same way, could face big fines for failing to resolve pension reviews.

Meetings with individual companies, including nearly all of the 26 firms named in a leaked report to the Independent last year, have been held in recent weeks. One company executive, who would not be named, said yesterday: "They did not specify what they had in mind, but we were left in no doubt that action is planned."

The new crackdown follows the PIA's admission last November that its members were more than a year behind a December 1995 deadline for resolving the problem.

Nigel Chambers, a director of Chambers Townsend Consultancy, which supplies software review systems to more than 30 top life and investment companies, said: "I have heard reports from some executives who said that this was one of the most unpleasant meetings they have ever attended. The PIA did not seem to understand what it was asking to be done."

Allied Dunbar, one company which has met with the PIA, said yesterday its discussions had been useful. Stuart Reynolds, divisional director of Allied Dunbar's legal department, said however that the PIA's target would be difficult to achieve.

One lawyer acting for several PIA members said: "The PIA is making veiled threats. But I think it would find it difficult to persuade even its kangaroo tribunals that members have breached rules if they are doing everything possible to resolve the matter."