LONDON, June 28 (Reuters) – The Financial Conduct Authority (FCA) has banned a pension adviser from holding senior management positions over his role in a high-profile mis-selling scandal that led to British Steel workers receiving poor financial advice around eight years ago.
Around 8,000 members of the British Steel Pension Scheme (BSPS) transferred their guaranteed, defined benefit retirement savings to other schemes – with around half receiving unsuitable advice – triggering two fines, three ban notices, one asset freezing injunction, a public censure and redress schemes.
Denis Morgan, of the now-defunct Pembrokeshire Mortgage Centre (PMC), was responsible for the quality of advice offered pension fund members between 2015 and 2017 and earned more than 2 million pounds ($2.5 million)in fees for the firm, the FCA said on Wednesday.
But his “lack of competence” put retirement funds at unnecessary risk, leaving vulnerable people without the advice they needed to make informed decisions, the regulator said, issuing a final notice in the case.
An FCA spokesperson said Morgan was not contesting the ban.
After the closure of a Tata Steel UK pension scheme, a legacy from previous owner British Steel, steelworkers could choose by December 2017 between moving to a new company scheme or joining a lifeboat scheme called the Pension Protection Fund.
But many were advised to move funds into schemes with no guaranteed income, generating bigger fees for advisers.
PMC, which gave transfer advice on funds worth around 123 million pounds – with an average transfer value per steelworker of around 314,000 pounds – was fined 2.4 million pounds last year.
Lawmakers in 2018 accused the FCA of being too slow to prevent financial advisers and unregulated introducers from swooping on steelworkers. About 7,800 lost an average 82,600 pounds in retirement savings, the report found.
Financial advisers were last year ordered to compensate some former BSPS members an average of 45,000 pounds each.
($1 = 0.7873 pounds)
Reporting by Kirstin Ridley; Editing by Emelia Sithole-Matarise
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