FCA has fined LJ Financial Planning Ltd £107,200 for recommending that 114 customers transfer their pensions to the value of around £6m into SIPPs over a period of nearly 3 years from March 2010. FCA found the firm often did not provide advice on the underlying investments to be held in the SIPPs which were often high-risk, esoteric and illiquid.
FCA said the firm should have considered not only whether a SIPP was a suitable investment vehicle for the customer but also whether the investments within it were suited to the customer’s needs and appetite for risk. It said the firm knew the investments were potentially high risk but was not prepared to advise customers on them – and it also found an email from a senior employee to the compliance department saying the firm did not want to know what those investments were.
In relation to this breach, the firm has already paid redress of over £2.5m and is contacting all other affected customers.
Additionally, FCA found the firm had, over a period of nearly 4 years, recommended a particular wrap platform and fund manager to its customers without disclosing that it had shareholdings in those entities.