FCA has updated its website to include details of its approach to investigations into firms and individuals who provided unsuitable advice in the context of transferring out of the British Steel pension scheme – and in relation to other DB schemes also. Following FCA’s research that suggested almost half of the 8,000 people who transferred out of the BSPS did so on the basis of unsuitable advice, it has now completed around 30 investigations into firms and individuals and is now working to reach final decisions. The actions come alongside its redress scheme which all firms that gave advice to transfer out of the BSPS must participate in.
It says most firms or individuals have been found to breach the principle of acting with due skill, care and diligence, but some have also acted without integrity. It has already published several notices, and has now added one further final notice and one decision notice that is subject to referral to the Tribunal.
- a financial penalty was levied against Mark Abley, sole director, main adviser and holder of all relevant controlled functions at County Capital Wealth Management Limited (in liquidation): his fine of £106,000 (including a 30% early settlement reduction) is to be paid directly to the FSCS, which is a practice FCA intends to continue. It has also banned Mr Abley. FCA found that, between April 2015 and February 2018, the firm advised 575 people including around 150 British Steel pensioners to transfer out of their DB schemes, and that around 56% of the cases showed unsuitable advice. FCA said Mr Abley had not obtained the necessary information to make a suitable recommendation, could not show the transfers were in the customers’ best interests and made errors in calculations. FCA commented that although Mr Abley said his starting point was that a transfer out would not be suitable, the high conversion rate suggested he did not follow this; and
- Geoffrey Armin, sole adviser at Retirement and Pension Planning Services Limited (in liquidation) has referred FCA’s decision to fine him £1.3m and ban him to the Tribunal. He has made the referral on the basis of what the appropriate action was for FCA to take and on whether the ban can be remitted back to FCA to reconsider. Mr Armin had claimed the penalty would cause him serious financial hardship but FCA felt there was evidence that he had dissipated some of his assets and had not provided full and frank information in relation to it. On that basis, it is not inclined to reduce the penalty it has decided to impose. During the period covered by the investigation. Mr Armin advised 422 customers on transfers from DB schemes, of which 183 were BSPS members, 174 of whom transferred out. FCA said Mr Armin failed to get the necessary information to advise, and proceeded on the assumption that a pension transfer to meet the customers’ stated objectives was in their best interest. In relation to the British Steel transfers, FCA said he did not properly investigate alternatives. It found Mr Armin breached Principles 2 and 7 in the giving of his advice and failing to take reasonable steps to ensure the firm was compliant with the relevant Principles and COBS rules.