The Financial Conduct Authority has provisionally fined a financial adviser and banned him from performing any senior management function in related to regulated activities.
He also faces being prohibited from advising consumers on pension transfers and pension opt outs.
Geoffrey Edward Armin of Retirement and Pension Planning Services Limited (in liquidation) has referred the decision notice to the Upper Tribunal.
This means that the FCA fine of £1.28m ($1.78m, €1.5m) and bans are contingent on the outcome of the appeal.
Pension transfers
According to the FCA, Armin advised 422 customers on the transfer of their defined benefit pensions into alternative pension arrangements.
This included 183 members of the British Steel Pension Scheme, 174 of whom transferred out following Armin’s recommendation.
The watchdog said it considers Armin “was seriously incompetent when advising on defined benefit pension transfers”.
It said he breached two of the regulator’s statements of principle:
- 2 – conducting business with due skill, care and diligence;
- 7 – taking reasonable steps to ensure that his company complied with relevant regulatory requirements and standard.
“In advising customers, Mr Armin failed to obtain the necessary information required to assess the suitability of a pension transfer for a customer, and also disregarded information including customers’ financial situation, income needs throughout retirement, and how their existing pension benefits compared to the proposed alternative.”
Number breakdown
The FCA continued: “In some cases, Mr Armin only informed customers of the consequences of their decision to forego the valuable guaranteed benefits offered by their defined benefit pension after they had already transferred out of the scheme.”
The total value of transfers Armin advised was £125m, of which £74m was related to British Steel Pension Scheme members.
The average transfer value was roughly £298,000. From all DB transfer advice, Retirement and Pension Planning Services received £2.2m in fees.
Approximately £1.2m was retained by the firm and Armin, which the FCA is seeking to remove.
