The FCA has banned three men from working in financial services and a fourth from holding key positions after identifying “disgraceful” failings in relation to occupational pension schemes.
Following a review of pension trustees CBW Trustees and CBW Pensions Forensics (collectively CBW) by The Pensions Regulator, which found serious flaws in the firms’ conduct, the FCA investigated two IFA firms.
The IFA firms, G&G Financial Services and Staverton Wealth Management, were appointed by CBW to advise six occupational pension schemes.
The FCA found that this advice led to the affected schemes unnecessarily moving around their investments, generating over £4m in commission.
The members of the pension schemes could also face lower retirement incomes as a result, as pension scheme assets were placed in potentially unsuitable high-risk investments.
FCA director of enforcement and financial crime Tracey McDermott says: “When it comes to pension funds, people expect their investments to be carefully managed given the potential impact on their retirement income.
“This makes the behaviour of this quartet particularly disgraceful. The FCA will not hesitate to act where we find inept or dishonest individuals.”
The FCA concluded that Michael Conway, a director of CBW, was incompetent, and banned him from working in financial services.
Conway was found to have influenced advice given by the IFA firms for personal gain.
Some £2.1m of the £4m in commission generated by the IFAs was paid to Conway. On one occasion Conway facilitated a sham introducer agreement between G&G and a taxi company to disguise a payment of £56,000.
Andrew Powell was found to have lacked integrity and has also been banned from working in financial services.
Powell acted as independent advisor to CBW whilst employed by G&G.
Despite raising concerns about the suitability of the investment, he recommended that the pension schemes invest £8m in a high-risk and illiquid property fund chosen by Conway.
Powell personally benefitted by allowing CBW to influence his advice between March and April 2010.
Martin Gwynn was found to be incompetent and incapable of properly discharging his duties, and has been banned from working in financial services.
He owned G&G and all its shares. Between March 2007 and September 2010 he failed to seek the necessary authorisation from the FSA when appointing Powell as a director, and failed to properly monitor the advice Powell offered to the pension schemes.
Gwynn also failed to take reasonable steps to investigate payments to Conway and other third parties.
Daniel Conway, the nephew of Michael Conway, was a director of Staverton, which was partially owned by Michael Conway.
Daniel Conway was appointed with no prior experience of advising occupational pension schemes.
Between January 2007 and April 2010, the FCA found he failed to take steps to understand the requirements of his role, or offer independent or suitable advice.
He has been banned from holding key positions in financial services.
G&G’s permissions were cancelled in September 2012, and Staverton’s permissions were cancelled in May 2012. Both firms are no longer trading.
The FCA says it has worked closely with TPR to take action against the responsible individuals and track down assets located outside the UK.
TPR has appointed a new trustee which has recovered a significant proportion of the relevant funds on behalf of the affected pension schemes.
CBW Trustees and CBW Pensions Forensics are not to be confused with accountancy firm CBW and its financial planning arm, CBW Financial Planning.