Four pension fund advisors have been sanctioned by the FCA for inappropriate behaviour.
Michael Conway, a former director of CBW Trustees (CBW), a financial planning firm appointed as corporate trustee to six distressed pension funds, was banned from working in the financial services. Mr Conway personally received £2.1 million to the detriment of these six pension schemes. Mr Conway was paid commissions by constructing artificial referral agreements with independent IFAs. These funds were paid to Mr Conway in the guise of commissions from the IFA, G&G Financial Services (G&G), hired to provide CBW with independent advice on how to invest the pension schemes’ assets. Mr Conway showed a lack of integrity and is therefore not a fit and proper person to perform any function in relation to regulated activities carried on by any authorised person, exempt person or exempt professional firm.
The FCA also found that members of the schemes could face lower retirement incomes because their assets were placed in potentially unsuitable high-risk investments.
Andrew Powell, an employee of G&G, was required to give independent advice, however, he improperly allowed himself to be directed by CBW to give particular advice in relation to certain pension schemes which comprised of some 1,500 individuals. He was banned as a fit and proper person after recommending that the six schemes invest £8 million in an illiquid property fund chosen by Mr Conway.
Martin Gywnn, the owner of G&G, was banned for failing to investigate the commission payments made to Mr Conway. He was also banned for failing to monitor the advice Mr Powell gave to CBW and for not seeking the necessary regulatory approval to appoint Mr Powell as a director of G&G.
Daniel Conway, a director of Staverton Wealth Management, which was partially owned by Michael Conway, was appointed as an adviser to CBW despite having no experience advising occupational pension schemes. He failed to take steps to understand the requirements of this role or to offer independent or suitable advice and was banned from holding senior roles in the industry.
The Pensions Regulator has removed CBW as trustee to the pension schemes and appointed an independent trustee. Following its appointment the independent trustee obtained an injunction against CBW, Michael Conway and others, freezing all relevant assets and commenced redress and recovery proceedings on behalf of the pension schemes. Those proceedings were subsequently settled on terms acceptable to the independent trustee. Taking into account the redress measures by the independent trustee, the FCA does not believe it would be appropriate to impose a separate penalty since this would diminish the level of assets potentially available to be recovered and returned to the pension schemes.
View FCA Final Notice 2013: Michael Conway, 16 December 2013
View FCA Final Notice 2013: Martin Peter Gywnn, 16 December 2013
View FCA Final Notice 2013: Daniel Christopher Conway, 16 December 2013
View FCA Final Notice 2013: Andrew Joseph Powell, 16 December 2013