The Financial Conduct Authority (FCA) said it had first conducted an investigation into Bank House IM’s activities in July of 2015 to gather information on the pension switching business. The switches had seen many clients move their savings into self-invested personal pensions (Sipps) which had underlying investments in high risk, unregulated assets.
“As a result of this information, the Authority had serious concerns about the suitability of the firm’s pension advice,” the FCA said in a supervisory notice issued to the firm on Wednesday.
On 17 September 2015, the FCA and Bank House IM implemented a Voluntary Requirement for it to not carry on any activities in relation to pension switches and/or pension transfers to Sipps – an agreement which is still in effect.
Voluntary agreement breached
However, the FCA said it became aware around August of last year that Bank House IM was still conducting pension switches to a Sipp account contrary to the terms of the Voluntary Requirement using a third party firm.
“The involvement of those who manage the firm’s affairs in these matters indicates that they cannot be expected to act with probity."
It discovered from the Sipp provider that Bank House had in fact advised 72 customers on 78 transactions involving pension switches to a Sipp account between 5 October 2015 and 13 October 2016. The total value of funds switched was approximately £2.65m ($3.23m, €3.0m).
“The firm also advised five customers to switch pensions to Sipp accounts offered by two other firms between 8 October 2015 and 10 November 2016,” the FCA said.
Consumer interest ignored
The FCA said it believes the Bank House IM has not conducted its affairs in an appropriate manner, having regard to the interests of consumers.
“It has repeatedly and over an extended period of time failed to comply with the Voluntary Requirement and to provide full and accurate information in response to requests by the Authority.
“The involvement of those who manage the firm’s affairs in these matters indicates that they cannot be expected to act with probity.
“It appears that the firm’s business is not being managed in such a way as to ensure its affairs will be conducted in a sound and prudent manner,” the FCA said.
The FCA said the firm had also not paid its regulatory fees totalling £22,859.29 which were due as at 13 August 2016 and had said it was unable to pay them due to its financial circumstances.
The firm’s draft management accounts show it made a loss of £137,087.39 in the year ending 31 May 2016. It has now approached the authority for consent to a sale of its client book.
