The Financial Conduct Authority has banned two advisers from Vintage Investment Services for providing poor advice in relation to defined benefit pension schemes.
Steven Hodgson and Paul Adam from the Cleveland-based firm have been banned for poorly advising people to transfer out of their defined pension schemes.
The two advisers have been fined more than £85,000 by the Financial Conduct Authority (FCA). The FCA regulates around 42,000 UK businesses, ensuring that they work within strict industry regulations.
Steven Hodgson has been fined £32,700 and Paul Adam £53,200. This money is payable to the Financial Services Compensation Scheme and will contribute to the compensation owed to clients of Vintage Investment Services. When FCA authorised financial services firms fail, the Government-backed Financial Services Compensation Scheme (FSCS) protects customers by providing compensation fully funded by the financial services industry.
In addition to the fines, the two have been banned from holding senior management positions at regulated firms.
The firm advised 97% of its defined benefit pension clients to transfer out of their pension between January 2016 and December 2017, and 99% of those clients ended up doing so. One hundred and sixty-five people transferred out, including 93 British Steel Pension Scheme (BSPS) members. The average transfer value was over £420,000, £375,000 for BSPS members.
Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA, said:
“People rely on good-quality pension advice to secure a comfortable retirement.
“Mr Adams and Mr Hodgson fell far short of this basic expectation, earning significant fees for themselves. Their fines will go to the FSCS to offset the cost of their failings.”
The FCA said two-thirds of the advice did not meet the required standards provided by the two advisers at Vintage. After being wrongly advised to transfer their pensions, one hundred and thirty-two clients continued to pay Vintage for ongoing advice.
Final Salary or Defined Benefit Pension Transfer Claims
+ −A Defined Benefit Pension Scheme is a type of pension that pays out a guaranteed income for life based on salary and years of service. Given the benefits and fixed sum paid out, it is generally considered poor advice to transfer out of these ‘gold standard’ schemes.
Defined benefit pension schemes are typically offered in public sector organisations or nationalised industries, including British Steel. Many steelworkers have lost thousands after being encouraged by financial advisers to transfer out of their British Steel Pension Scheme.
The Financial Conduct Authority (FCA) announced measures in 2020 to tackle the issues surrounding defined benefit pension transfers.
TLW Solicitors specialises in Defined Benefit Pension Transfer Claims. We have helped many clients across a wide range of industry sectors to protect their retirement pots despite having been negligently advised to transfer their Defined Benefit Pension into a Self-Invested Personal Pension (SIPP).
TLW Solicitors’ view
+ −Sarah Spruce, Legal Director at TLW Solicitors, said of the FCA’s action:
“Poorly advised defined pension transfers can destroy retirement plans. Whilst some of these transfers were made many years ago, we are advising clients that they may still be able to claim compensation, for example, if you are a steel worker’s widow or if your Independent Financial Adviser has gone out of business, has been taken over or changed its name.
“If you are concerned about the transfer of yours or a loved one’s company, defined benefit or final salary pension scheme, please get in touch with a member of my specialist team for a confidential and no-obligation discussion. We can take further details about the pension transfer and see if you may be eligible to make a ‘no-win, no-fee’ claim for compensation.”
TLW Solicitors can help
+ −If you have transferred your workplace pension into a SIPP, please get in touch with us to see if you can make a claim.
We’re experienced in the claims and appeals processes, whether dealing directly with financial services providers or through the Financial Ombudsman Service (FOS). FOS is an independent body that settles complaints between consumers and financial services businesses.
If the financial firm that provided you with advice has shut down, you may still be able to claim compensation through the Financial Services Compensation Scheme (FSCS).
Get in touch
+ −If you are concerned that you or a loved one were given unsuitable pension transfer advice, please call us on 0800 169 5925, email info@tlwsolicitors.co.uk or complete one of the contact forms below to arrange an initial, no-obligation consultation.
Getting advice is essential as strict time limits apply.
Minimum case values apply.
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