The Financial Conduct Authority (FCA) has imposed a £590,544 fine and banned two financial advisers and two partners from St Martin’s Partners LLP (SMP).
It was found that between October 2015 and July 2016, SMP’s advice model led 547 individuals into improper pension transfers, typically into high-risk investments such as Cape Verde hotel developments.
According to the FCA, SMP advisers, Adrian Douglas and Liam Martin, as well as partners, Oxberry and Cuthbert, failed to do proper due diligence. Additionally, in November 2016, the FCA issued a requirement for SMP to stop using the advise model.
But the FCA has now fined Oxberry £241,869, and Martin and Douglas each £128,356, and banned them from providing financial services. Cuthbert was fined £91,963 and also banned, but has not appealed.
Douglas, Martin, and Oxberry have challenged their decisions by taking their cases to the Upper Tribunal, which will decide if the penalties are fair. The Tribunal’s final decision, which will be publicly announced, will determine if the FCA’s actions are kept as they are or changed.
Cuthbert, however, has agreed to settle with the FCA and has not appealed. His case includes criticism of Oxberry, who is also contesting his decision with the Upper Tribunal.
SMP is now in liquidation, and the FSCS has reimbursed clients for almost £13.4mn.
FCA joint executive director of enforcement and market oversight Therese Chambers says: “People need to be able to trust the advice they receive about their pensions. But these 4 individuals put SMP’s customers in danger of giving up guaranteed retirement income for high-risk investments, like overseas hotel developments. They received significant financial benefit in doing so, at the expense of their customers.
“There was a reckless disregard for customers’ financial situation, their needs through retirement and how their existing benefits compared to the proposed alternative. It is right the FCA takes steps to prevent these people from working in the financial industry and impose penalties.”