Sipp advice lands boss in hot water with FCA

An advisory firm chief executive has been handed an official warning notice by the FCA over Sipp related advice. The unnamed boss benefited financially from both the fees customers paid for his firm’s advice on a Sipp and the commission the provider of the unregulated investment paid the introducer firm for the sale of the unregulated investment, the FCA said.The FCA said that as a direct result of ‘failings’ by the unidentified boss customers were “at significant risk of transferring (and in many cases did transfer) their pension funds into Sipps which were not suitable for them”.Clients were not given the “opportunity to make that decision in light of sufficient information about the actual and potential conflicts of interest at the firm”, according to the FCA notice.The individual was a director and chief executive at a firm which provided advice to customers who were considering transferring money out of their pension funds into unregulated investments via Sipps.Explaining the reasons for the warning, an FCA document stated: “The individual also promoted unregulated investments through an unregulated introducer company (‘the introducer firm’) in which the individual was a shareholder and director.“As a result, the individual benefitted financially from both the fees customers paid for the firm’s advice on the Sipp transfer, and the commission the provider of the unregulated investment paid the introducer firm for the sale of the unregulated investment to the customer.“The FCA considers that the individual contravened Principle 7 of the FCA’s Statement of Principles for Approved Persons by failing to take reasonable steps to ensure that the business of the firm, for which the individual was responsible as a director, complied with the relevant requirements and standards of the regulatory system.”The FCA stated that during the period specified the director “failed to take reasonable steps to ensure that the firm treated customers fairly (and) established a business model under which it provided adequate personal recommendations on pension transfers.”The director also failed to take steps to ensure the firm’s communications with customers in relation to personal recommendations were clear, fair and not misleading, the FCA stated.The warning notice is not the final decision of the FCA. The individual has the right to make representations to the Regulatory Decisions Committee.If a decision notice is issued, the individual has the right to refer the matter to the Upper Tribunal which would reach an independent decision on the appropriate action for the FCA to take, if any.

Sipp advice lands boss in hot water with FCA

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