The FCA has published decisions against 3 individuals and fined and banned a fourth in relation to a pension transfer advice model that the FCA consider put guaranteed retirement benefits at risk. Its action relates to 2 partners and 2 financial advisers at Sr Martin’s Partners LLP, and to a model that operated between October 2015 and July 2016. The FCA found that 547 customers were put at significant risk of transferring out of guaranteed defined benefit pensions into investments that were unlikely to be suitable. Often the customers were introduced by introducer firms including one that was a subsidiary of a hotel development group into which the firm advised investing.
The FCA found the model did not take into account the information required to assess the suitability of a pension transfer nor how the benefits of the customer’s existing scheme compared to the new investment – and was not intended to do so.
The FCA took action against the 2 partners of the firm and 2 advisers who plated important roles in designing and operating the model. One of the partners accepted a fine and a ban, but the other 3 individuals are all contesting their fines and bans before the Tribunal.
The firm is now in liquidation, and the FSCS has to date paid over £13.4m in compensation to the firm’s clients.