The FCA has banned two advisers for suitability failings in Sipp advice.
Andrew Rees and Timothy Hughes, partners at 1 Stop Financial Services, have been banned from performing any significant influence function.
The two men will pay their £490,100 fine to the Financial Services Compensation Scheme in the first instance of a fine being paid to the compensation scheme.
The FSCS who are investigating claims that redress may be payable to 1 Stop customers.
The FCA says Rees and Hughes advised customers to switch into Sipps regardless of suitability.
Between October 2010 and November 2012 Rees and Hughes’ firm advised nearly 2,000 customers with £112m worth of savings on switching their existing pensions.
1 Stop’s customers used the Sipps to invest in diamonds and overseas property which were typically not permitted by the customers’ existing schemes.
The Pembrokeshire company has now ceased trading and applied to cancel its FCA permissions.
FCA director of enforcement and financial crime Tracey McDermott says: “By enabling customers to invest in unregulated and often high risk products without assessing suitability, these men exposed customers to the risk of losing their hard earned pension funds.
”This was then compounded by the partners’ failure to ensure that their customers fully understood these risks.”