FCA bans two individuals for pension advice failings

FCA bans two individuals for pension advice failings

Two former directors of advisory firm TailorMade Independent have been banned and fined by the Financial Conduct Authority for advice failings related to self-invested personal pensions.

Lloyd Pope and Peter Legerton have been banned from senior positions in financial services, with the former being fined £93,800 while the latter would have been fined £84,000 but has not been due to financial hardship.

According to a statement from the regulator, it found both men failed to ensure that TMI assessed the suitability of investments made through Sipps for its customers.

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Alongside this, the pair failed to ensure that their firm identified and managed its conflicts of interests, as well as failing to oversee their compliance function, which had been outsourced to external consultants.

The FCA said Mr Legerton benefitted financially from poorly managed conflicts of interest between TMI and an unregulated firm that introduced new business.

Customers typically invested in high-risk investments and more than half of them were put in overseas property operated by the Harlequin group of companies, which are under investigation by the Serious Fraud Office.

The firm provided advice to customers on transferring their existing pension funds into unregulated investments such as green oil, biofuels, farmland and overseas property via Sipps.

Between 2010 and 2013, 1,661 customers invested £112m in these products, many of which were not typically permitted by their existing pension schemes.

Georgina Philippou, acting director of enforcement and market oversight at the FCA, said: “Their actions mean many customers face losing all of their hard earned pension funds and fell woefully short of the standards we expect of senior individuals.”

The news comes following FTAdviser’s recent investigation into the treatment of commercial property as an asset class in the context of self-invested personal pensions, which found a number of discrepancies in providers’ treatment of the asset class.

Yesterday, the Financial Services Compensation Scheme confirmed a £20m interim levy for life and pensions intermediaries relating to “bad advice” given on Sipps, with chief executive Mark Neale warning that there are ‘cautionary lessons’ for the future in the new pension freedoms world as the potential for scamming increases.