FCA Bans IFA and Fines £1.3m for £125m DB Transfers

The Financial Conduct Authority (FCA) has today published its Decision Notice against Geoffrey Edward Armin of Retirement and Pension Planning Services Limited (RPPS), now in liquidation.

Mr Armin ‘advised’ on 422 defined benefit transfers (£125m in total) of which 183 were British Steel Pensions Scheme transfers, totalling £74m.  The total fee income received for this was over £2.2m in adviser fees.

The FCA has ruled that Mr Armin had failed in many of his regulatory duties namely:

• Statement of Principle 2: conducting business with due skill, care and diligence
• Statement of Principle 7: taking reasonable steps to ensure that the firm complied with relevant regulatory requirements and standards
• Mr Armin failed to obtain the necessary information required to assess the suitability of a pension transfer for a customer
• Disregarded information including clients financial situation and income needs throughout retirement
• Ignored how clients existing pension benefits compared to the proposed alternative pension scheme

Mr Armin also only informed customers of the consequences of their decision to forego the valuable guaranteed benefits offered by their defined benefit pension after they had already transferred out of the scheme.  As a result, a fine of £1.28m was imposed to recover net adviser fees that he received in conducting the ‘advice’.

Mr Armin has subsequently appealed and has referred the Decision Notice to the Upper Tribunal where he will present his own case of his affairs and conduct in a final attempt to reverse the notice.

Comment

We cannot comment on the above but we hope it puts consumers on notice as to how complex defined benefit transfer advice is, the costs involved and the valuable guaranteed benefits that you give up when you transfer out of a defined benefit scheme. 

The British Steel pension mis-selling scandal has made it so much more difficult for consumers to secure high quality, independent financial advice on defined benefit transfers as the costs are so high given that many financial advisers have stopped giving advice in this sector due to huge professional indemnity insurance premium costs and excesses starting at £25,000 per case. 

It is why we stopped advising in the area in July 2020 despite never having received a complaint in this area and only actually taking on around 2% of all enquiries that did have overriding reasons to transfer.