The person issued with the warning notice was approved to perform compliance oversight at two authorised firms, which the regulator also did not name.
Between them, the firms gave advice to over 700 members of DB schemes about the merits of transferring their pension into defined contribution (DC) schemes.
The individual is accused of failing to use due skill, care and diligence in carrying out his duties, specifically failing “to obtain appropriate independent expert opinion and advice” to ensure that the advice process was compliant “with applicable regulatory requirements”.
Serious risk
The regulator said: “As a result of the individual’s failings, DB scheme members were at serious risk of receiving unsuitable able. This risk crystallised, resulting in a serious risk of unsuitable customer outcomes.
“The FCA considers it likely that a significant proportion of the approximately 500 members who transferred from a DB scheme to a DC scheme would have decided not to transfer had they received suitable advice.”
The 500 scheme holders, between them, transferred around £12.7m ($15.8m, €14.7m) into DC schemes.
The advice and transfers took place between 1 February 2006 and 30 April 2009.
The notice was issued on 17 January 2017, with the UK watchdog only posting the notice on its website on Monday.
Enhanced value transfer (EVT)
The advice was given as part of an EVT exercise aimed at incentivising DB scheme members to transfer to DC schemes.
According to The Pensions Regulator, during EVT exercises, firms are required act in the best interests of their clients and monitor the quality of advice given to ensure that a transfer is suitable. Firms must also identify and manage conflicts of interest.
Due process
The FCA stated that a warning notice is not a final decision. “The individual has the right to make representations to the Regulatory Decisions Committee (RDC) which, in the light of those representations, will decide on the appropriate action and whether to issue a decision notice.
“The RDC is a committee of the FCA board which decides whether the FCA should give certain statutory notices described as within its scope by the FCA’s Handbook.
“If a decision notice is issued, the individual has the right to refer the matter to the Upper Tribunal which would reach an independent decision on the appropriate action for the FCA to take, if any. If either the RDC or the Upper Tribunal decides that no further action should be taken, the FCA will publish a notice of discontinuance provided it has the individual’s consent.”
