The Financial Conduct Authority has banned Keith Dickinson and Andrew Allen of Mansion Park from advising customers on pension transfers and pension opt-outs.
Dickinson and Allen have been told to pay £70,000 and £85,600, respectively, to the Financial Services Compensation Scheme to contribute towards the compensation owed to Mansion Park’s customers.
The FSCS has so far paid out almost £3mn in compensation to Mansion Park customers for the unsuitable advice they received.
The FCA found that between June 2015 and December 2017 Dickinson provided pension transfer advice that was unsuitable and was signed off by Allen.
Around 400 Mansion Park customers were advised to transfer out of their defined benefits transfer scheme.
Of these, Dickinson advised 135 of them, including 68 members of the British Steel Pension Scheme.
In total, those advised by Dickinson had pension benefits worth approximately £36.8mn.
The FCA reviewed a sample of 21 of Mansion Park's completed pension transfer advice files. Dickinson was the primary adviser on seven of these and in all of these seven files he failed to collect sufficient client information.
The FCA said in most of the advice Dickinson provided, and the files Allen signed off, the advice was unsuitable because it was based on the flawed assumption that transferring would be in the customer’s best interest.
The advice provided did not assess whether customers were relying on income from their defined benefit pension scheme in retirement, whether the customer understood the risks of transferring out or whether they could bear those financial risks, the regulator alleged.
The FCA said Allen demonstrated a lack of competence in his oversight of advice for 328 (82 per cent) of those 400 Mansion Park customers, including 72 who were BSPS members.
Clients transferring out of the BSPS were in a vulnerable position due to the uncertainty surrounding the future of their pension scheme and the FCA said it believed that in advising BSPS members, Dickinson started with a presumption that the client should transfer out and he overstated the risks associated with the Pension Protection Fund.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “People turned to Mansion Park to give them vital advice so they’d have financial peace of mind in retirement.
“Both Dickinson and Allen failed to do their job. They put people’s hard earned retirement money at risk and so it is only right that they contribute to the costs of compensating these people.
"We will continue to take action where failings by advisers put their customers at risk.”
The FCA said any customers who were advised to transfer by Mansion Park should contact the FSCS to see if they are owed compensation.
sonia.rach@ft.com
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