The Financial Conduct Authority has taken enforcement action against two advisers for “recklessly” exposing pension savers to unsuitable investments.
Both Stephen Joseph Burdett and James Paul Goodchild have been banned from working in regulated financial services and fined £311,762 and £47,600 respectively.
Burdett held a senior role at Synergy Wealth Limited, while Goodchild had a senior position at Westbury Private Clients.
The FCA alleges that Burdett’s actions led to 232 personal pension funds worth over £10m being switched into high-risk investment portfolios that were unsuitable for most customers.
The portfolios were created and managed by Goodchild at Westbury, with 39 per cent of overall holdings linked to a single offshore property developer.
The FCA added that Burdett sent customers reports implying they would get low or medium risk portfolios; while Goodchild included the misleading terms ‘cautious’ and ‘balanced’ in the names of two of these three high-risk portfolios.
In addition Burdett acted as a director of Synergy despite knowing he did not have the required FCA approval to perform such a function. The FCA said he also failed to co-operate appropriately with its investigation.
The FCA intervened in 2016, with both firms subsequently going into liquidation. It said that the Financial Services Compensation Scheme has paid out over £1.4m to victims to date.
The FCA added that both advisers had gained financially from this misconduct.
FCA joint executive director of enforcement and market oversight Therese Chambers says: “These customers built up pensions over their working lives to help fund their retirement. Mr Burdett and Mr Goodchild worked together to switch their hard-earned pensions into obviously unsuitable high-risk portfolios.
“Both were involved in creating misleading materials and made significant personal profits from their actions. We will not tolerate such conduct.”
