A financial advisor who allegedly advised dozens of clients to transfer out of their defined benefit pensions is being sanctioned by the U.K.s Financial Conduct Authority (FCA).
In a notice, the FCA ruled that an advisor, Daniel Thomas — a director and financial adviser at DPT Financial Solutions Ltd. — should be fined £742,700 (approximately $1.4 million) and banned from the industry after it found he provided clients with pension transfer advice that he wasn’t qualified to give.
Thomas is appealing the decision to the U.K.’s Upper Tribunal, so the regulator’s findings are considered preliminary.
In its notice, the FCA said that, between April 2014 and September 2019, Thomas advised 53 clients about 63 transfers out of their DB pensions — decisions that require specially-qualified advisors in the U.K., given that the FCA said, “it would not normally be in an individual pension holder’s best interests to transfer out of a [defined benefit] scheme.”
In this case, the regulator found that Thomas misled both his clients and pension providers about his qualifications, and misled his principal firm — Quilter Financial Services Ltd. — about his involvement in the pension transfer decisions, which generated at least £173,000 in fees for him.
“When you advise someone on their pension, you hold their future in your hands. Mr. Thomas recklessly betrayed that responsibility. We will not stop acting against those ignoring our rules and unfairly putting people and their hard-earned money at risk,” said Therese Chambers, executive director of enforcement and market oversight at the FCA, in a release.
The FCA also alleged that Thomas destroyed client files and failed to cooperate with the regulator’s investigation.
The proposed fine is comprised of disgorging the estimated £173,000 (plus interest) that was generated by the alleged misconduct, plus 40% of his income during the time of the breach (£450,538) that’s intended to “reflect the seriousness of the misconduct,” plus a sanction for failing to cooperate.