FCA Fines Pembrokeshire Mortgage Centre Ltd £2.4m For Failings

Dec 9, 2022 1:21:45 PM

What has happened?

In December 2022, FCA fined Pembrokeshire Mortgage Centre Limited (trading as County Financial Consultants) (in liquidation) £2,354,331 for unsuitable advice to consumers to transfer out of the British Steel Pension Scheme (BSPS) and other defined benefit (DB) pension schemes.

What are the key points??

The FCA’s view is that most people should keep the guaranteed income provided by a DB pension. PMC had advised 420 consumers, nearly two-thirds of whom were BSPS members, on whether to transfer out of their DB scheme, and overall 93% were advised to transfer. PMC earned over £2 million in transfer and ongoing advice fees.

Many of the consumers advised were in a vulnerable position due to the uncertainty surrounding the future of BSPS and the short timescale they had in which to make a decision. However, they did not receive the quality of advice that they needed to make an informed decision, since PMC gave unsuitable advice in 60% of cases.

The failings on PMC’s part included the provision of generic suitability reports that were not tailored to the circumstances of individual consumers and that contained contradictory, misleading, and confusing statements. PMC also failed to have adequate resources to deal with the increase in cases caused by BSPS, further impacting the quality of defined benefit pension transfer advice provided.

Many consumers were advised to transfer out even though they were relying on the guaranteed income to fund their retirement and could not afford to bear the risk of transferring out. This included those who needed the money to provide for dependents needing long-term care.

The FCA continues to progress around 30 ongoing enforcement investigations into firms and individuals relating wholly or partly to BSPS advice, all of which are at a very advanced stage and some are in litigation.

How can we help you?

If you’d like to know more about how we can help you with your pension transfer advice or DB pension review arrangements, or any other regulatory compliance issues, our specialist team is here to help. We can conduct pension transfer back book reviews, including reviews of BSPS advice.

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