FCA fines compliance officer over DB pension transfer failings

Written by Talya Misiri
14/07/17

The Financial Conduct Authority has fined FGS McClure Watters (FGS) and Lanyon Astor Buller Ltd compliance oversight officer David Watters £75,000 for breaching regulatory standards on pension transfer advice.

Watters, who served in the role at FGS and then LAB, failed to take reasonable steps to ensure advice on enhanced transfer value pension transfers were adequate and met official standards. As a result, consumers were left at considerable risk of unsuitable advice about the benefits of transferring their pension from a defined benefit to a defined contribution scheme, the FCA noted.

An estimated 500 customers that received advice from FGS or LAB transferred their pensions from a DB scheme to a DC scheme, with an overall value of approximately £12.7m.

“In many cases, it may have been unnecessary for customers to leave their DB schemes, thereby losing their guaranteed benefits,” the FCA said.

The regulator found that Watters had not given sufficient consideration to “whether the advice process was compliant” and did not take “reasonable steps to gain a sufficient understanding of the relevant regulatory requirements”. Also, he did not get an appropriate third party review of the processes to ensure compliance or take measures to ensure that advisers were properly monitored to reduce risk.

FCA executive director of enforcement and market oversight Mark Steward, said: “It was Mr Watters’ responsibility to take reasonable steps to put in place a compliant advice process. His failure to do this placed customers at risk of needlessly losing valuable benefits for their retirement.”

LAB has said that it will contact and reimburse affected customers.

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