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Warning Notice Statement 24/1






1.1
The Financial Conduct Authority (the FCA) gave an individual a warning notice on
16 November 2023 proposing to take action in respect of the conduct summarised
in this statement.

IMPORTANT: A warning notice is not the final decision of the FCA. 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.

1.2
Between 2 April 2015 and 25 June 2019 (“the Relevant Period”) the firm advised a
large number of customers to transfer out of their Defined Benefit Pension Scheme
(“DBPS”) to an alternative pension arrangement, notwithstanding FCA guidance
which created a presumption of unsuitability in respect of transferring out of a
DBPS.

1.3
During the Relevant Period the individual acted as a CF30 (Customer) and Pension
Transfer Specialist (“PTS”) at the firm; additionally, they were approved to perform
both the CF1 (Director) and CF10 (Compliance Oversight) functions, with overall
responsibility for the firm’s compliance with regulatory requirements and
standards.

1.4
The FCA considers that the individual breached Statement of Principle 1 of the FCA’s
Statements of Principle for Approved Persons when carrying out their controlled
functions.

1.5
In their role as a CF30 and PTS the individual was reckless and thereby acted
without integrity because they:

•
made Personal Recommendations despite having failed to obtain from
customers adequate information relating to their financial situation, including
their additional resource and current expenditure details, that was necessary
for them to properly assess whether it would be suitable to transfer out of the
DBPS;

•
made Personal Recommendations despite having failed to adequately assess
customers’ attitudes to investment and transfer risk, which was necessary for
them properly to assess whether it would be suitable to transfer out of the
DBPS; and

•
approved Suitability Reports which failed to provide their customers with
sufficient information from the transfer value analysis to enable them to be
able to make an informed decision about whether to complete a Pension
Transfer.

1.6
This was despite knowing that each of these steps was a necessary prerequisite to
providing a Personal Recommendation.

1.7
In their oversight roles as a CF1 and CF10 the individual was reckless and thereby
acted without integrity because they failed to take any proper steps to ensure that:

•
the firm adequately assessed the suitability of the Pension Transfer for the
customer, including adequately assessing customers’ objectives and attitude
to risk;

•
the customer fact find processes used by the firm were adequate and
appropriate, meaning that insufficient customer information was gathered to
assess suitability;

•
an adequate and appropriate compliance monitoring system was in place at the
firm to ensure compliance with the FCA’s requirements and standards for
Pension Transfer advice;

•
the firm maintained adequate customer files and business records; and

•
the firm allocated adequate resources to the firm’s compliance function and to
the CF10 role.

1.8
This was despite knowing that their oversight failures increased the risk that the
firm might provide unsuitable Pension Transfer advice to its customers, in breach
of several COBS rules applicable to the firm, and despite the significant increase in
the number of customers seeking such advice during the Relevant Period.

1.9
Additionally, during the Relevant Period the individual acted dishonestly in relation
to their financial affairs, agreed a settlement in respect of the dishonest conduct
and failed to notify the FCA of the same, breaching Statement of Principle 4.

1.10
The FCA considers that the failings summarised above meant that the advice
provided, both by the individual and the firm, did not comply with regulatory
requirements and standards, creating a significant risk that the advice that a
customer should transfer out of their DBPS would not be suitable for them.