The Financial Conduct Authority (FCA) has banned and fined five directors from three advice firms for their roles in pension transfer advice that affected some 2,000 customers.
Two of the three firms involved – Financial Page and Henderson Carter Associates – are in liquidation and have so far cost the Financial Services Compensation Scheme (FSCS) some £26.8m. The third firm, Bank House Investment Management, has been ordered to pay a penalty of £311,639.
A total of 2,004 customers invested £76m of their pension assets with the three firms. So far, the FSCS has paid compensation to 1,106 investors and the scheme is considering further claims.
The five directors involved – Andrew Page, Thomas Ward, Aiden Henderson, Robert Ward and Tristan Freer – have each been banned from holding directorships and fined a total of £1.05m.
Andrew Page was a director of Financial Page and has been fined £321,033, while the FCA said Ward was – an unapproved de facto director of the firm – had been penalised £416,558. Henderson, a director of Henderson Carter Associates, was fined £179,179.
Freer and Robert Ward were both directors of Bank House Investment Management and have been fined £52,725 and £88,100 respectively.
The five directors and Bank House Investment Management have referred the FCA’s decisions to the Upper Tribunal, where they will present their respective cases.
The FCA said the three firms had “little meaningful oversight and involvement” in the advice provided to customers in their name. The firms adopted a pension review and advice process that involved outsourcing important functions to unauthorised third parties Hennessy Jones and City Administration, the watchdog added.
Each of the firms told customers they provided bespoke independent investment advice but the FCA said that, in reality, customers were recommended pension switches and pension transfers to products that invested in “high-risk, illiquid assets” that were unlikely to be suitable for them.
The regulator said the four approved directors – Freer, Henderson, Page and Robert Ward – should have known the products were unlikely to be suitable for retail customers, except in very limited circumstances, and acted recklessly in “closing their minds to the obvious risks”.
The FCA accused the directors of acting dishonestly by providing false and/or misleading information to the regulator – in some cases on more than one occasion.
In the case of Thomas Ward, the FCA said he acted as a director for Financial Page but was not approved to do so. It said that, in his capacity as a de facto director he acted “without integrity”.