The Financial Conduct Authority is seeking to fine five individuals and one advice firm more than £1m for their part in pension advice, which led to £26m in compensation paid out by the Financial Services Compensation Scheme.
In decision notices published today (May 9) the regulator has imposed a penalty of £311,639 on advice firm Bank House Investment Management Limited and issued public censures on Financial Page Ltd and Henderson Carter Associates Limited.
Financial Page Ltd and Henderson Carter Associates Limited are in liquidation having been declared in default by the FSCS in April 2017 and millions have since paid out by the scheme in respect of pension advice given by the two companies.
Five individuals who ran the three advice firms have been fined by the regulator and issued with prohibitions, although all are challenging the decision notices at the Upper Tribunal and the penalties therefore have no effect pending the outcome of the cases.
Bank House Investment Management Limited is also challenging its fine at tribunal.
Andrew Page, director of Financial Page Ltd, has been issued with a prohibition by the regulator and a fine of £321,033 and Thomas Ward, an unapproved de facto director of Financial Page Ltd, has been issued with a prohibition and a penalty of £416,558.
Aiden Henderson, director of Henderson Carter Associates Limited, has been issued with a prohibition and fine of £179,179.
Robert Ward and Tristan Freer have both been issued with prohibitions and penalties of £88,100 and £52,725 respectively, for their roles as directors of Bank House Investment Management Limited.
In January 2017 the FCA told Gloucestershire-based Bank House Investment Management to cease all regulated activity after it broke a voluntary agreement with the regulator relating to pension switches and transfers into self-invested personal pensions.
The FCA claimed the three advice firms had "little meaningful oversight" and involvement in the service provided to its customers, adopting a pension review and advice process which involved outsourcing functions to unauthorised third parties.
The regulator stated: "HCA, FPL and BHIM held themselves out to customers as providing bespoke independent investment advice based on a comprehensive and fair analysis of the whole market, but that did not reflect the reality of the service that was provided.
"In reality customers were recommended pension switches and pension transfers to products that invested in high risk, illiquid assets which were unlikely to be suitable for them."
The regulator alleges Mr Page, Mr Henderson, Robert Ward and Mr Freer "closed their minds to the obvious risks" of the unsuitable products recommended to customers, claiming they had acted "recklessly" as approved persons in controlled functions at each company.
The FCA also claimed the directors had acted "dishonestly" by providing false and misleading information to the regulator, in some cases on more than one occasion.
The FCA claims Thomas Ward in his role as de facto director of Financial Page Ltd acted "without integrity" and showed a "willingness to enrich himself" at the expense of the company's customers.