Mark Abley, of County Capital Wealth Management Ltd (CCWM), which is now in liquidation, has been banned by the FCA from providing advice on pension transfers after giving unsuitable advice.
Between April 2015 and February 2018, 575 people were advised by CCWM to transfer out of their defined benefit pension schemes – 150 were members of the British Steel Pension Scheme.
Over half (56%) of the advice was found to fail to meet the required standards and showed “a lack of competence”. Abley, who was responsible for this advice, received at least £60,000 ($76,228) for providing this advice.
“Mr Abley’s incompetence meant that he failed to give customers the advice they needed to make a significant decision about their retirement,” said Therese Chambers, joint Executive Director of Enforcement and Market Oversight at the FCA.
Besides the ban, Abley will also pay £106,100 ($134,797) to the Financial Services Compensation Scheme (FSCS) to add to the redress owed to CCWM’s customers. By settling the case, Abley qualified for a 30% discount on the penalty. Should he fail to pay, the regulator says that they will enforce this amount as a fine.
Errors in calculations
According to the findings, Abley failed to:
- have the required information to make a suitable recommendation or properly assess if the customers understood and could stand the financial risks of transferring their guaranteed pension;
- provide evidence to show that the transfers were in the customers’ best interest; and
- provide correct calculations between existing and new pension schemes to customers.
“He earned fees while putting their retirement money at risk. It is only right that he contributes to the costs of compensating these customers,” Chamber added.
As of March 14, 2023, the FSCS has received 53 pension transfer claims against CCWM, and has paid out more than £2.1m ($2.7m) in compensation to CCWM’s customers.
Another banned adviser
In a separate action, Denis Lee Morgan of Pembrokeshire Mortgage Centre Limited (PMC) (now in liquidation), has been banned by the regulator from advising on pension transfers and pension opt outs, and from holding any senior management function in a regulated firm.
PMC was also fined £2,354,331 ($2,876m) in December last year, for giving unsuitable advice to consumers to transfer out of BSPS and defined benefit pension schemes.
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA, called PMC’s quality of advice woeful, and said: “The failings were particularly egregious in the context of the British Steel Pension Scheme.”
“His [Denis Morgan’s] incompetence put their retirement funds at unnecessary risk, while earning over £2m in fees for his firm, which he didn’t deserve.”
Therese Chambers, joint Executive Director of Enforcement and Market Oversight, FCA
Between June 2015 and December 2017, Morgan “demonstrated a lack of competence in his oversight of PMC’s Pension Transfer advice process”, and, according to the FCA, failed in most cases to consider:
- customers’ financial situation;
- their retirement needs; and
- their attitude to risk or that transferring would be in their best interests.
“People depended on Mr Morgan to provide them with suitable advice on one of the most important decisions of their life. His incompetence put their retirement funds at unnecessary risk, while earning over £2m in fees for his firm, which he didn’t deserve,” said Therese Chambers.
The total value of the transferred funds on which PMC gave advice was approximately worth £123m ($156m), with an average transfer value of about £293,000 ($371.794), and £314,000 ($398.441) for British Steel Pension Scheme members.
As of November 30, 2022, the FSCS has received 213 claims against PMC, and paid out over £13.3m ($16.9m) in compensation.
Earlier FCA actions
Regarding the British Steel Pension Scheme, the FCA has taken multiple disciplinary actions in relations to firms giving unsuitable advice:
- June 2023 – Forcing three more firms to reverse misleading pension offers.
- May 2023 – Censuring an adviser over incorrect advice to British Steel pensioners.
- February 2023 – Naming 15 more firms in the row over the redress scheme.
- February 2023 – Forcing two firms, Abbey Lane Financial Associates Limited and Estate Capital Financial Management Limited, to stop making deceptive offers to British Steel pensioners.
- January 2023 – Issuing a warning to firms over a ‘deliberate attempt to exclude’ pensioners from the compensation scheme.
In January 2023, the FCA faced a legal challenge from a group of advisers, which was believed to be an attempt to stall the redress scheme. The legal challenge was however dropped later in April.