The Financial Conduct Authority (FCA) has published its decision to ban two financial advisers and two partners from St Martin’s Partners LLP (SMP) from working in financial services, and fine them a collective £590,544.

The regulator said that it considered the four individuals responsible for a pension transfer advice model that put people’s guaranteed retirement benefits at risk.

However, three of the four (Adrian Douglas, Liam Martin, and Frank Oxberry) have each referred their decision notices to the Upper Tribunal, which will determine what, if any, the appropriate action is for the FCA to take.

The fourth member, Alec Cuthbert, agreed to settle the FCA’s case against him and therefore has not made a reference to the Upper Tribunal.

Oxberry was issued with a fine of £241,869, while Martin and Douglas were each fined £128,356, and all three were banned from working in financial services, subject to the Upper Tribunal’s determination.

Meanwhile, Cuthbert was fined £91,963 and banned from working in financial services.

The FCA stated that, between October 2015 and July 2016, SMP’s advice model put 547 customers at “significant risk” of transferring out of defined benefit pension schemes into investments that were unlikely to be suitable for them.

These investments included hotel developments in Cape Verde offered by The Resort Group.

Many of the customers were brought to SMP by introducer firms, including First Review Pension Services (FRPS), a subsidiary of The Resort Group, the regulator stated.

The FCA felt that SMP’s advice model did not consider the information needed to assess the suitability of a pension transfer or how the benefits of the customer’s existing scheme compared to the new investment, and that SMP did not intend it to.

Douglas and Martin, who are both qualified pension advisers, played “important roles” in designing and operating the model used by SMP, the FCA said.

Meanwhile, SMP’s two partners, Oxberry and Cuthbert, had oversight of the firm and its advisers, and did not ensure that due diligence was carried out on FRPS or at least 16 other introducer firms involved in the model, according to the regulator.

A requirement was agreed in November 2016 that stopped SMP using the advice model.

“People need to be able to trust the advice they receive about their pensions,” commented FCA joint executive director of enforcement and market oversight, Therese Chambers.

“But these four individuals put SMP’s customers in danger of giving up guaranteed retirement income for high-risk investments, like overseas hotel developments. They received significant financial benefit in doing so, at the expense of their customers.

“There was a reckless disregard for customers’ financial situation, their needs through retirement and how their existing benefits compared to the proposed alternative. It is right the FCA takes steps to prevent these people from working in the financial industry and impose penalties.”

SMP was liquidated in 2019, and the Financial Services Compensation Scheme has paid out over £13.4m in compensation to SMP’s clients as a result of losses suffered following advice they received.

This article originally appeared on our sister title, Wealth Investment News.

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