The Financial Conduct Authority (FCA) has banned Paul Steel of Estate Matters Financial from working in financial services, with £850,000 to be paid in redress to the Financial Services Compensation Scheme (FSCS).

According to the FCA, Steel provided unsuitable advice to customers to transfer out of their defined benefit (DB) pensions, including the British Steel Pension Scheme (BSPS).

The FCA found that more than 480 clients received DB transfer advice from Estate Matters Financial between 2015 and 2018, with over £140m of pension assets transferred as a result.

The watchdog also revealed that this advice "overwhelmingly" (86 per cent) failed to meet the required standards, as Steel failed to collect the right information and/or disclose the risks of transferring.

The FCA stated that Steel had also demonstrated a lack of honesty and integrity in selling his client book for less than its value, to himself, which meant that customers who had lost out from the poor advice could not pursue Estate Matters Financial for redress.

As a result of his conduct in selling his client book, the FCA sought and obtained a freezing injunction, and brought proceedings in the High Court seeking redress for customer losses.

However, it has since agreed to settle those proceedings on the basis of Mr Steel’s agreement not to contest the FCA’s penalties.

In addition to this, although the FCA imposed a fine £3,694,400 on Steel, it agreed not to enforce this, given concerns that most or all of Steel’s assets would have been spent on the High Court proceedings rather than compensating consumers.

However, Steel will be required to pay £850,000 to the FSCS as part of the settlement, which represents substantially all of Mr Steel’s remaining assets and ensures that he will contribute to the cost of compensating customers who received his poor advice.

FCA joint executive director of enforcement and market oversight, Therese Chambers, commented: “Mr Steel failed to provide suitable pension transfer advice.

“But he also failed to act with honesty and integrity when he improperly sold the firm’s assets for less than their value - to himself - so that he could enjoy the profits of the business without the burden of the risks that he had created.

“We are determined that those who fail in their duties to their customers take responsibility for paying towards redress and do not expect the FSCS, and the vast majority of firms who do the right thing, to pick up the tab for their failings.”

This marks the latest in a number of enforcement decisions from the FCA in relation to DB transfer advice, recently banning Denis Lee Morgan of Pembrokeshire Mortgage Centre (in liquidation) from advising any customers on pension transfers and opt, and ordering a financial adviser from County Capital Wealth Management to pay over £100,000 to FSCS for poor pension transfer advice.

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