FCA imposes ban on two advisors for misleading advice
The Financial Conduct Authority (FCA) has taken action against Nigel Lewis and Susan Jones, previously associated with the now-liquidated West Wales Financial Services Limited (WWFS), over their roles in providing inappropriate pension transfer advice.
This decision includes a ban on advising on pension transfers and opt-outs and prohibits Lewis from holding senior management positions in any regulated firm.
Lewis and Jones have been ordered to contribute £26,800 and £40,888, respectively, to the Financial Services Compensation Scheme (FSCS). This payment aims to help compensate WWFS customers who received inadequate guidance.
During a period in 2017, WWFS advised customers, many from the British Steel Pension Scheme (BSPS), to shift their pensions from secure defined benefit plans to riskier defined contribution schemes. This advice, affecting funds worth nearly £10m, was based on the flawed premise that such transfers would be beneficial to the customers.
Jones, in particular, recommended 27 out of 28 clients to move away from their defined benefit pension, with 25 being BSPS members. Lewis, responsible for overseeing the firm’s advice quality, failed to ensure its suitability.
The FCA’s intervention prevented WWFS from advising an additional 141 BSPS members, potentially safeguarding about £44m in pension funds from being inappropriately transferred.
Therese Chambers, joint executive director of enforcement & market oversight at the FCA, criticised the advisors for their “carelessness and incompetence,” stressing the need for trustworthy financial advice.