Regulation  

FCA bans four over £4m crooked advice commission deals

The Financial Conduct Authority has banned three men from working in the financial services industry and a fourth from holding ‘key positions’ after they unnecessarily moved clients’ pensions to generate over £4m of commission.

The bans follow a review of CBW Trustees Limited and CBW Pensions Forensics Ltd by the Pension Regulator which found serious flaws in CBW’s conduct, the FCA said in a statement.

All four men were associated with two independent financial advisors appointed by CBW to advise six occupational pension schemes. The FCA found that this advice led to the affected schemes unnecessarily moving around their investments, generating over £4m in commission.

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Members of the affected pension schemes could also face lower retirement incomes, as pension scheme assets were placed in potentially unsuitable high-risk investments, the FCa added.

According to the findings of an FCA investigation, Michael Conway and Andrew Powell were found to lack integrity, while Martin Gwynn and Daniel Conway were deemed “incompetent, and incapable of properly discharging their duties”.

Mr Conway was a director of CBW, but failed to disclose that he stood to gain financially from advice offered to CBW by IFA G&G Financial Services Ltd. In April 2010 he actively influenced the financial advice given by Andrew Powell on behalf of G&G for personal gain.

The FCA said on one occasion Mr Coway facilitated a sham introducer agreement between G&G and a taxi company to disguise a payment of £56,000, and that £2.1m of the total commission generated by the IFAs was paid to him.

Mr Powell acted as independent advisor to CBW whilst employed by G&G. Despite raising concerns about the suitability of the investment, he recommended that the affected pension schemes should invest £8m in a high-risk and illiquid property fund chosen by Michael Conway.

Martin Gwynn owned G&G and all its shares. Between March 2007 and September 2010 he failed to seek the necessary authorisation when appointing Mr Powell as a director and also failed to “take reasonable steps to investigate payments to [Mr] Conway and other third parties”.

Daniel Conway was a director of Staverton Wealth Management Ltd, which was partially owned by Michael Conway. Daniel Conway was appointed with no prior experience and between January 2007 and April 2010 “failed to take steps to understand the requirements of his role, or offer independent or suitable advice”.

Tracey McDermott, FCA director of enforcement and financial crime said: “When it comes to pension funds, people expect their investments to be carefully managed given the potential impact on their retirement income.

“This makes the behaviour of this quartet particularly disgraceful. The FCA will not hesitate to act where we find inept or dishonest individuals.”

To safeguard consumers’ interests, Michael Conway, Mr Powell and Mr Gwynn received industry bans. Daniel Conway has been stopped from performing any roles designated as ‘controlled functions’ by the FCA.

The firms above are not related to the London-based financial planning and accountancy firm Carter Backer Winter LLP.