Seriously incompetent pensions advisor handed ban and £200k fine
Summary
The FCA has banned Geoffrey Armin from advising customers on pension transfers and opt-outs and from holding any senior management function in a regulated firm. The ban follows the FCA’s ruling that Armin provided ‘seriously incompetent’ advice while running the subsequently dissolved Retirement and Pension Planning Services Limited.
Armin advised 422 customers on the transfer of their defined benefit (DB) pensions. These included 183 members of the British Steel Pension Scheme, 174 of whom transferred out of the scheme on his recommendation. DB transfer advice fees totalling £2.2m resulted, 55% of which (approximately £1.2m) was retained by Armin and his firm.
The FCA found that Armin routinely failed to obtain the information he needed to assess the suitability of pension transfers, providing unsuitable advice as a result. This was despite FCA guidance stating that the default assumption should always be that such transfers are not in a customer’s best interests.
In some cases Armin only informed customers of the consequences of giving up their DB pensions’ valuable guaranteed benefits after they had transferred out.
FCA joint executive director of enforcement and market oversight Therese Chambers said ‘Mr Armin gave bad advice and pocketed large fees for doing so. People rely on the advice they’re given for financial security into old age. Mr Armin’s advice not only put the pensions people had worked for at risk, it also eroded trust between advisers and clients. Such callous incompetence has no place in financial services.'
Armin referred the FCA’s decision to the Upper Tribunal, with a hearing scheduled to commence on 11 September. However, on 6 September, he agreed to pay a substantial proportion of his assets to the Financial Services Compensation Scheme (FSCS)and withdrew the referral. Had he not reached this settlement, Armin’s assets would have gone on the costs of proceedings, leaving nothing with which to pay any redress or fine.
Armin will pay £200,000 to the FSCS to contribute towards the redress due to his customers. To date, the FSCS has paid out £3,961,517 in compensation to Armin’s customers.