The FCA has banned financial adviser Mark Abley of County Capital Wealth Management Ltd and told him to pay £106,100 to the Financial Services Compensation Scheme (FSCS) for poor pension transfer advice to BSPS members.
CCWM – which is now in liquidation – was an IFA firm based in Spennymoor, County Durham which was declared in default in July 2022.
The regulator said Mr Abley earned £60,000 in fees for what it termed his “incompetence”, including payments from hundreds of BSPS members.
Mr Abley has been ordered to pay the £106,100 to the FSCS rather than the FCA to contribute towards the redress owed to CCWM’s customers.
If he fails to pay the money or any part of it, the FCA said it will enforce it as a fine.
According to the regulator, between April 2015 and February 2018 County Capital Wealth Management advised 575 people to transfer out of their defined benefit pension schemes – including almost 150 members of the British Steel Pension Scheme.
Mr Abley was responsible for the advice, the FCA said, more than half of which (56%) failed to meet the required standards and showed a lack of competence. He received a financial benefit of at least £60,000 for providing the advice.
The FCA said Mr Abley did not obtain the information needed to make a suitable recommendation or properly assess whether the customer could understand and bear the financial risks of transferring their guaranteed pension.
The watchdog said he failed to provide evidence to show that the transfers were in his customers’ best interest. There were also errors in the calculations used to compare customers’ existing pension schemes with the schemes it was proposed they transfer to.
Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “Mr Abley’s incompetence meant that he failed to give customers the advice they needed to make a significant decision about their retirement. This included hundreds of people who were dealing with the uncertainty around the British Steel Pension Scheme.
“He earned fees while putting their retirement money at risk. It is only right that he contributes to the costs of compensating these customers.’
The average transfer value for customers included in the 18 files reviewed by the FCA was £287,943. Transfer values ranged from £51,218 to £826,875.
In 6 cases the FSCS awarded the claimant the maximum compensation available of £85,000. Had it not been for the compensation limit of £85,000, the total compensation payable to customers would have been approximately £2.36m.
CCWM’s professional indemnity insurance provides cover up to £1.75m which may reduce the burden on the FSCS.
Mr Abley settled the case and in doing so qualified for a 30% discount on the penalty.
As of 14 March 2023, the FSCS has upheld 53 Pension Transfer claims against CCWM and paid out more than £2.1m in compensation to customers of CCWM. Any customers who were advised to transfer should contact the FSCS to see if they are owed redress.
