The Financial Conduct Authority (FCA) has announced its intention to ban two financial advisers and two partners from St Martin’s Partners (SMP) following a scandal involving pension transfer advice. Adrian Douglas, Liam Martin, and SMP partners Frank Oxberry and Alec Cuthbert were found responsible for running a pension transfer advice model that jeopardised the guaranteed retirement benefits of many individuals. As a result, the FCA plans to issue fines totalling £590,544.
All three have challenged the FCA’s decision by referring the case to the Upper Tribunal as FCA aims to fine Oxberry £241,869, and both Martin and Douglas £128,356 each, along with barring them from the financial services industry. Meanwhile, Alec Cuthbert, who has been fined £91,963, has agreed to a settlement and accepted a permanent ban from financial services, opting not to contest the FCA’s ruling at the Upper Tribunal.
Between October 2015 and July 2016, SMP’s advice model put 547 clients at “significant” risk of losing their guaranteed defined benefit pensions by transferring into potentially unsuitable investments, including Cape Verde hotel developments offered by The Resort Group. Many clients were referred to SMP by introducer firms, notably First Review Pension Services (FRPS), a subsidiary of The Resort Group. According to the FCA, SMP was fully aware of the link between FRPS and The Resort Group.
The FCA criticised SMP’s advice model, claiming it did not properly assess the suitability of transferring clients’ pensions or adequately compare the benefits of existing schemes to new investments. Furthermore, the regulator alleged that SMP did not intend to consider these crucial factors.
Douglas and Martin played central roles in developing and managing the transfer advice model at the Essex-based firm, while Oxberry and Cuthbert were responsible for overseeing the firm’s operations and advisers. The FCA found that Oxberry and Cuthbert failed to carry out proper due diligence on FRPS and at least 16 other introducer firms involved in the Mis Sold Final Salary Pension scheme.
In November 2016, an agreement was reached to stop SMP from using this controversial advice model.
FCA joint executive director of enforcement and market oversight, Therese Chambers, expressed her strong disapproval, stating that the four individuals gained financially at the expense of their clients. She remarked: “There was a reckless disregard for customers’ financial situation, their needs through retirement, and how their existing benefits compared to the proposed alternatives. It is right that the FCA takes action to prevent these individuals from working in the financial sector and to impose appropriate penalties.”
SMP has since gone into liquidation, and this latest enforcement action by the FCA follows its broader effort to improve monitoring of appointed representatives by principal firms.
We fully support the FCA’s actions against these financial advisers for misleading their valued clients. At Claim My Loss, we are dedicated to assisting individuals who have been victims of financial mis-selling by unscrupulous advisors. Through our Defined Benefit Pension Transfer Claims service, we work diligently to help affected individuals recover their compensation. We guide clients through the process, helping them understand how much they may be entitled to claim and ensuring they receive the justice they deserve.
If you are unsure about your claim, you can book a free 15 minutes call with our expert claim advisers here.
