The Financial Conduct Authority (FCA) has banned two former advisers of West Wales Financial Services Limited (in liquidation) (WWFS) from advising customers on pension transfers and pension opt outs.

The FCA found that, between March and December 2017, WWFS provided unsuitable pension transfer advice based on the incorrect assumption that it would be in their customers’ best interests to transfer out of their secure defined benefit pension.

In particular, Susan Jones advised 27 of 28 customers to transfer out of their defined benefit (DB) pension scheme, 25 of whom were members of the British Steel Pension Scheme (BSPS).

The FCA also found that Nigel Lewis had failed in his responsibility to ensure that WWFS provided suitable advice and to take reasonable steps to ensure advice was suitable.

In total, £9,769,550 of pension funds were transferred to riskier defined contribution (DC) schemes.

This figure could have been higher, but the FCA intervened and stopped WWFS from processing transfers for a further 141 customers, all of whom were members of the BSPS.

Had it not been for the FCA’s intervention, the risk of loss would have continued, and these customers may have transferred out funds totalling £43,722,771.

Following its investigation, the FCA confirmed that it has banned both Lewis and Jones from advising customers on pension transfers and pension opt outs, while Lewis has also been banned from holding any senior management functions in a regulated firm.

In addition to this, Lewis and Jones will pay £26,800 and £40,888, respectively, to the Financial Services Compensation Scheme (FSCS) to contribute towards the compensation owed to WWFS customers.

As at 21 November 2023, the FSCS had paid out £758,725 in compensation to customers of WWFS, although this would have been £972,197, had it not been for the compensation limit of £85,000.

FCA joint director of enforcement and market oversight, Therese Chambers, stated: “Mr Lewis and Ms Jones performed a double act of carelessness and incompetence that put people’s hard-earned pensions at risk.

“They would have continued to provide bad advice to many more had it not been for the FCA’s timely intervention. People need someone they can trust to give them informed advice on their financial future - and it’s not these two.”

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