The FCA has provisionally fined an adviser nearly £1.3m over poor transfer advice given to clients, including 183 steelworkers.
Geoffrey Edward Armin of Retirement and Pension Planning Services, who the regulator described as “seriously incompetent”, is planning to appeal the decision to the upper tribunal.
Therefore, any findings and actions in the FCA’s decision notice are provisional until the tribunal makes its ruling.
The FCA is also seeking to ban Armin from advising on pension transfers and opt outs, as well as from performing any senior management function in relation to regulated activities.
Armin advised a total of 422 customers on DB transfers worth £125m.
This included 183 members of the British Steel Pensions Scheme, with transfers worth £74m of which 174 transferred out of the scheme following Armin’s recommendation.
The FCA alleged Armin failed to obtain the necessary information to assess the suitability of a pension transfer and also disregarded information including customers’ financial situation, income needs throughout retirement, and how their existing pension benefits compared to the proposed alternative.
In some cases Armin only informed customers of the consequences of their decision to give up the guaranteed benefits offered by their DB pension after they had already transferred out of the scheme.
According to the FCA's review of Armin's advice, in 17 out of 30 cases he carried out no comparison at all between the DB scheme and the pension into which he proposed his clients transfer.
In 61 cases he carried out cashflow modelling only after the transfer had been completed.
Retirement and Pension Planning Services, which is now in liquidation, operated a contingent charging model and received £2.2m in fees for all DB transfer advice, 55 per cent (approximately £1.2m) of which was retained by Armin and the firm.
The FCA has alleged some of the revenue generated by this activity was paid into Armin's own pension.
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