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FCA eyes advice firm director ban over unsuitable pension transfers

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The FCA is seeking to ban former Tailormade chief executive Alistair Burns and fine him £233,600 for alleged pension transfer suitability failures.

Between January 2010 and January 2013, Tailormade gave advice to customers who were considering transferring or switching their existing pension funds via Sipps into unregulated investments, such as green oil, biofuels, farmland and overseas property.

In the FCA’s view, Burns failed to ensure that Tailormade provided suitable advice to its clients. Burns also failed to ensure that the business managed fairly and clearly disclosed his own personal conflicts of interest and the conflicts of interest relating to other individuals at Tailormade, the FCA argues.

1,661 customers invested £112,420,985 in alternative investments over the period. In the FCA’s view, the personal recommendations process used to advise customers, for which Burns was jointly responsible, was inadequate.

The regulator also says Burns received significant financial benefit through his position as a director and shareholder of an unregulated introducer also operating under the ‘Tailormade’ name, which referred clients to Tailormade Independent. The FCA says the financial benefit he received created a conflict of interest.

As of September 2016 the Financial Services Compensation Scheme has upheld 919 claims of unsuitable advice against Tailormade, with compensation of more than £40m paid to date.

More than half of the affected customers invested in a firm specialising in overseas property which later went into liquidation with all of the investments lost.

The FCA published its decision notice today. Burns will appeal the fine and ban at the Upper Tribunal.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. The nerve of this guy appealing. He should be charged & locked up. He has cost FSCS (other IFA’s) £40M, when you look at the other MM article about an interim levy & just 4 firms responsible for 73% of FSCS SIPP Compensation claims. Unbelievable.

  2. have the fca also investigated that tailermade also set up a claims company to get there clients money back and then re charge the customers for a 2nd time.

    scammed them, then used the compensation scheme to get more money out of there clients.

  3. Why is he not in jail, because the regulator has yet to act and change the system to stop this, that’s why. We are told its to difficult to change the law, or is it a case it is to easy to sit back and make the industry pay?

    If the law were to be changed and these individuals where looking at very long jail time, confiscation of assets, do you think they would be so keen.

  4. Say the numbers slowly… more than one thousand six hundred people chose to invest over £112 million into a pile of what appears to have largely been crap and nobody in charge thought to enquire further at the time? I cannot believe that surely?! Blame the customers if you like, blame the firm of course, but also blame the people charged with oversight of the firms operations (whoever they may have been) because £112 million pounds is a lot of money to pass under a radar as unregulated investment!!

  5. Tailormade advisors are still out there re investing the compensation received they help get with the likes of Fachett into gold!

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