FCA has issued final notices to two firms in relation to their pension advice business and misleading the FCA. The fact pattern for both firms was similar, involving their use of a Pension Review and Advice Process, initiated by a third party.
- The Final Notice issued to Bank House Investment Management Limited (BHIML) refers to breaches of PRIN 1 and section 20 FSMA related to mis-selling and failing to be open and co-operative in the investment adviser and pensions sector. BHIML has been fined £311,639. When FCA investigated, the firm provided false and misleading information to try to prevent FCA identifying misconduct by the firm and two of its senior individuals. FCA found the firm knew what the process involved and how set responses from customers would lead to a recommendation to switch their pensions to high-risk, illiquid, unregulated assets in SIPPs – yet held itself out as providing bespoke, independent advice. So not only did the firm carry out activities outside its permission, it did not carry out sufficient due diligence on the underlying investments, did not act on the knowledge of a conflict involving the third party and, in FCA’s view, given the experience of the firm, it should have been obvious to it that it needed to give consideration to the risks and how the scheme would operate in practice. During the period of the breach 265 customers switched around £8.5m of assets into high risk, illiquid SIPP investments. Finally, the firm had closed its mind to the risk it would breach a VREQ that had required it not to carry out any activities in relation to pension switches or transfers to SIPPs;. FSCS has declared the firm in default.
- The Final Notice issued to Henderson Carter Associates Limited (HCAL) refers to breaches of PRIN 1 and Section 20 FSMA related to mis-selling and failing to be open and co-operative in the investment adviser and pensions sector. Many of the same failings were identified in HCAL as in BHIML – and 879 customers transferred over £35m into the relevant SIPPs. HCAL is now in liquidation, and had it not been, FCA would have imposed a fine of £239,900.
- Both firms breached s20 FSMA by advising on pension transfers outside of their regulatory permissions
- FCA found that the way in which the firms had acted had put customers in serious risk of unsuitable advice.
FCA has issued final notices to five directors of financial advice firms from working in financial services and fined them over £1 million, after they caused significant losses to pension customers. Three related to the firms above, and two to individuals employed by Financial Page Limited, one of whom acted dishonestly and recklessly in performing the controlled functions for which he was approved, and the other of whom acted as a director without being approved.
- The Final Notice issued to Andrew Mark Thomas Page imposed a fine of £361,071 and a ban.
- The Final Notice issued to William Mark Tristan Freer imposed a fine of £42,898 and a ban.
- The Final Notice issued to Robert Ward imposed a fine of £88,100 and a ban.
- The Final Notice issued to Thomas Henry Ward imposed a fine of £482,718 and a ban.
- The Final Notice issued to Aiden Henderson imposed a fine of £199,939 and a ban.