FINAL NOTICE

Individual

Number:
KXD01341




Date:
7 September 2023



1.
ACTION

1.1.
For the reasons given in this Final Notice, the Authority hereby:

(1) publishes a statement of Mr Dickinson’s misconduct for failing to comply with

Statement of Principle 2, pursuant to section 66 of the Act; and

(2) makes an order, pursuant to section 56 of the Act, prohibiting Mr Dickinson

from performing any function in relation to the regulated activity of advising

on Pension Transfers and Pension Opt-outs carried on by an authorised

person, exempt person or exempt professional firm.

1.2.
The Authority would have imposed a financial penalty of £403,814 on Mr Dickinson

(reduced to £245,914 as Mr Dickinson has provided verifiable evidence that

payment of the full amount of the financial penalty would cause him serious

financial hardship). However, the Authority recognises that there is a significant

liability for redress for Mansion Park’s customers which has fallen to the Financial

Services Compensation Scheme (FSCS). As at 17 March 2023, the FSCS has paid

out £2,988,898.02 in compensation to customers of Mansion Park. Had it not been

for the compensation limit of £85,000, the total compensation available to

customers would have been £5,322,495.71. In these circumstances, the Authority

has agreed with Mr Dickinson that in lieu of the imposition of a financial penalty,

the sum of £70,000 be paid direct to the FSCS to contribute towards any redress

due to Mansion Park’s customers. This is in furtherance of the Authority’s

consumer protection objective. In light of the above and taking into account the

exceptional circumstances of the British Steel Pension Scheme (BSPS), the

Authority hereby publishes a statement of Mr Dickinson’s misconduct.

2.
SUMMARY OF REASONS

2.1.
During the Relevant Period (8 June 2015 to 17 December 2017), Mr Dickinson

was a qualified Pension Transfer Specialist (PTS) performing the CF30 (Customer)

controlled function at Mansion Park. He was also a CF1 (Director) from 26 April

2016. Mr Dickinson acted without due skill, care and diligence, in breach of

Statement of Principle 2, in giving unsuitable Pension Transfer advice to

customers (some of whom were BSPS members), resulting in customers’

retirement funds being unnecessarily put at risk, against their best interests.

2.2.
Mansion Park advised a total of 400 customers to transfer out of their Defined

Benefit Pension Scheme (DBPS) during the Relevant Period, 81 of whom were

members of the BSPS. Mr Dickinson advised 135 (33%) of Mansion Park’s 400

customers who were considering a Pension Transfer during the Relevant Period,

including 68 customers who were members of the BSPS (representing 50% of the

customers he advised during the Relevant Period). Mr Dickinson’s 135 clients had

a total initial CETV of approximately £36.8 million with an average CETV of

approximately £240,000. Mansion Park’s clients were not charged if the adviser’s

recommendation was not to proceed with the Pension Transfer, or if the transfer

did not take place. Mr Dickinson also carried out second-level checks on the

Pension Transfer advice of other advisers at Mansion Park in respect of 14

customer files.

2.3.
The Authority reviewed a sample of 21 of Mansion Park’s completed Pension

Transfer advice files dating from the Relevant Period (the Sample Files). Mr

Dickinson was the primary adviser on 7 of the Sample Files, 5 of which related to

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customers who were members of the BSPS. For the majority of these customers,

their pension fund was their most valuable asset, and many had limited additional

resources or other pension provisions.

2.4.
Of the 7 Sample Files where Mr Dickinson was the primary adviser:

a) in all of the files, Mr Dickinson failed to collect sufficient client information. In

1 of these files, Mr Dickinson made a Personal Recommendation without

collecting the necessary information to assess suitability of advice; and

b) in all of the files which contained enough information to assess suitability, Mr

Dickinson provided unsuitable Pension Transfer advice.

2.5.
As at 17 March 2023, the FSCS has upheld 48 claims against Mansion Park relating

to the provision of DBPS Pension Transfer advice where Mr Dickinson was

identified as the adviser. The FSCS has paid out £2,049,580.24 in compensation

on these claims. The Financial Ombudsman Service has issued 1 final decision

dated 8 September 2020 upholding a complaint made by a customer regarding

DBPS Pension Transfer advice received from Mansion Park.

FCA’s Statements of Principle for Approved Persons


2.6.
During the Relevant Period, Statement of Principle 2 stated that an approved

person must act with due skill, care and diligence in carrying out their accountable

functions.

Mr Dickinson’s failings in the performance of his CF30 (Customer) function

2.7.
The Authority considers that, during the Relevant Period, by reason of the matters

described below in section 4 of this Notice, Mr Dickinson breached Statement of

Principle 2, in that he failed to act with due skill, care and diligence when advising

customers on Pension Transfers.

2.8.
In particular, Mr Dickinson:

a) gave unsuitable Pension Transfer advice because he based Personal

Recommendations on the incorrect assumption that a transfer to meet the

customer’s stated objectives was in the customer’s best interests. In reality,

many customers’ objectives were either not realisable or financially viable, or

could have been met by the existing scheme;

b) failed to assess, or give due consideration to, whether customers would be

reliant on the income from their DBPS or whether they could financially bear

the risks involved in a Pension Transfer. He did this despite knowing that,

following the recommended transfer, customers’ retirement income would be

dependent on the performance of the new investment;

c) advised clients with no source of retirement income other than their DBPS and

state pension, and who had cautious attitudes to risk, to give up the

guaranteed benefits offered by their DBPS without sufficient justification;

d) failed properly to assess whether the customer had the necessary experience

and knowledge to understand the risks involved in the Pension Transfer

recommended, and failed to give due consideration to this where they did not;

e) failed to undertake adequate transfer analysis to compare the benefits likely

to be paid under the DBPS with benefits paid out under the Proposed

Arrangement or other pension scheme into which it was proposed that the

client should transfer; and

f) failed to ensure his Suitability Reports contained adequate information about

the possible disadvantages of transferring out of the customer’s DBPS, having

regard to their specific circumstances and objectives. Although Suitability

Reports contained caveats and risk warnings regarding Pension Transfers, the

Authority considers that the Personal Recommendation was unclear and risked

being confusing for customers. The warnings and Personal Recommendation

to transfer were often contradictory, with no explanation.

2.9.
BSPS members made up 18% of Mansion Park’s Pension Transfer advice

customers during the Relevant Period, and constituted 50% of the customers Mr

Dickinson advised to transfer out of their DBPS during the Relevant Period. These

individuals were in a vulnerable position at the time due to the uncertainty

surrounding their employment and the future of the BSPS and it was critical that

the advice they received from Mr Dickinson, and on which they placed reliance,

was clear, fair and not misleading and suitable for their particular circumstances.

Unfortunately, many of Mr Dickinson’s BSPS customers did not receive suitable

advice to enable them to make a sufficiently informed decision about their Pension

Transfer.

2.10.
The unsuitable advice provided by Mr Dickinson had serious consequences,

specifically a lasting impact on his customers’ pension arrangements and their

financial wellbeing during retirement.

2.11.
The Authority considers Mr Dickinson’s failings to be serious because:

a) they caused a significant risk of loss to customers who transferred out of their

DBPS as a result of Mr Dickinson’s advice. The total value of transferred funds

across the 135 customers he advised during the Relevant Period was

approximately £36.8 million with an average CETV of approximately

£240,000;

b) Mr Dickinson was either unaware of, or did not appreciate the significance of,

the regulatory guidance which provides that the starting point should be to

assume that a transfer from a DBPS would not be suitable. A reasonably

competent PTS should be aware of that starting point, that a DBPS offers

valuable guaranteed benefits, and that there can therefore be significant risks

to clients if they transfer out of their DBPS; and

c)
his advice impacted a number of BSPS members, many of whom were in a

vulnerable position due to the uncertainty surrounding the future of the BSPS.

2.12.
The Authority considers that Mr Dickinson has demonstrated a lack of competence

and capability to advise on Pension Transfers and Pension Opt-outs. As a result of

the facts and matters set out in this Notice, Mr Dickinson is not a fit and proper

person to carry out the regulated activity of advising on Pension Transfers and

Pension Opt-outs carried on by an authorised person, exempt person or exempt

professional firm. The Authority hereby prohibits Mr Dickinson from performing

any such function.

2.13.
The Authority would have imposed a financial penalty of £403,814 on Mr Dickinson

(reduced to £245,914 as Mr Dickinson has provided verifiable evidence that

payment of the full amount of the financial penalty would cause him serious

financial hardship). However, the Authority recognises that there is a significant

liability for redress for Mansion Park’s customers which has fallen to the FSCS. As

at 17 March 2023, the FSCS has paid out £2,988,898.02 in compensation to

customers of Mansion Park. Had it not been for the compensation limit of £85,000,

the total compensation available to customers would have been £5,322,495.71.

In these circumstances, the Authority has agreed with Mr Dickinson that in lieu

of the imposition of a financial penalty, the sum of £70,000 be paid direct to the

FSCS to contribute towards any redress due to Mansion Park’s customers. This is

in furtherance of the Authority’s consumer protection objective. In light of the

above and taking into account the exceptional circumstances of the BSPS, the

Authority hereby publishes a statement of Mr Dickinson’s misconduct for failing to

comply with Statement of Principle 2.

3.
DEFINITIONS

3.1.
The definitions below are used in this Notice:

“the Act” means the Financial Services and Markets Act 2000;

“Attitude to Risk” means the client’s attitude to, and understanding of, the risk of

giving up safeguarded benefits for flexible benefits;

“the Authority” means the body corporate previously known as the Financial

Services Authority and renamed on 1 April 2013 as the Financial Conduct

Authority;

“the Authority’s Rules” means the Authority’s Conduct of Business Sourcebook as

applicable during the Relevant Period;

“Statements of Principle” or “APER” means the Authority’s Statements of Principle

and Code of Practice for Approved Persons;

“the British Steel Pension Scheme” or “BSPS” means the British Steel DBPS that

was in force during the period 8 June 2015 to 13 December 2017;

“BSPS 2” means the scheme which replaced the BSPS after 13 December 2017;

“Ceding Arrangement” means the customer’s existing pension arrangement with

safeguarded benefits;

“CETV” means Cash Equivalent Transfer Value, which is a lump sum available to

the member upon transferring their pension benefits into an alternative pension.

It is calculated according to actuarial principles;

7


“COBS” means the Conduct of Business Sourcebook in the Authority’s Handbook;

“Critical Yield” means an illustration of the annual growth rate (net of charges)

that the customer would need to obtain upon investment of the CETV in order to

replicate the benefits provided by the DBPS;

“Defined Benefit Pension Scheme” or “DBPS” means an occupational pension that

pays out a defined benefit or guaranteed specified amount to the pension holder

based on factors such as the number of years worked and the customer’s salary;

“Defined Contribution Pension” or “DC Pension” means a pension that pays out a

non-guaranteed and unspecified amount depending on the defined contributions

made and the performance of investments;

“DEPP” means the Authority’s Decision Procedure and Penalties Manual;

“EG” means the Authority’s Enforcement Guide;

“the Handbook” means the Authority’s Handbook of rules and guidance;

“Mansion Park” means Mansion Park Limited;

“Pension Commencement Lump Sum” or “PCLS” means a tax-free lump sum of

money that can be drawn from the pension fund at retirement;

“Pension Opt-out” has the meaning given in the Authority’s Handbook and

includes a transaction resulting from the decision of a retail client to opt out of an

occupational pension scheme to which his employer contributes and of which they

are a member;

“Pension Protection Fund” or “PPF” means a statutory public corporation which

protects people who belong to a DBPS, if the employer responsible for funding the

scheme they have paid into becomes insolvent;

“Pension Transfer” has the meaning given in the Authority’s Handbook and means

a transfer payment made in respect of any safeguarded benefits with a view to

obtaining a right or entitlement to flexible benefits under another pension scheme;

“Pension Transfer Specialist” or “PTS” has the meaning given in the Authority’s

Handbook and includes an individual appointed by a firm to check the suitability

of, amongst other things, a Pension Transfer, who has passed the required

examinations as specified in the Training and Competence Sourcebook, part of

the Handbook;

“Personal Recommendation” means a recommendation that is advice on transfer

of pension benefits into a personal pension or Self-Invested Personal Pension,

and is presented as suitable for the customer to whom it is made, or is based on

a consideration of the customer’s circumstances;

“Preferred Retirement Date” means the date when the customer plans to retire;

“Proposed Arrangement” means the arrangement with flexible benefits into which

the customer would move their funds from the Ceding Arrangement;

“Regulated Apportionment Arrangement” or “RAA” means the statutory

mechanism that can be used in corporate restructuring whereby a sponsoring

employer of a DBPS stops participating in the pension scheme (therefore freeing

the sponsoring employer from its financial obligations to the pension scheme) in

order to avoid insolvency, subject to certain conditions being met and the RAA

being approved by The Pensions Regulator and the PPF;

“Relevant Period” means the period from 8 June 2015 to 17 December 2017;

"the Sample Files” means the 21 completed Pension Transfer advice files provided

by Mansion Park and reviewed by the Authority;

“Suitability Report” means the report which a firm must provide to its client under

COBS 9.4.1R which, amongst other things, explains why Mansion Park has

concluded that a recommended transaction is suitable for the client;

“Tribunal” means the Upper Tribunal (Tax and Chancery Chamber);

“TVAS” means “Transfer Value Analysis” and is the comparison that a firm was

required to carry out in accordance with COBS 19.1.2R prior to 1 October 2018,

when a firm gave advice or a Personal Recommendation about, amongst other

things, a Pension Transfer; and

“TVAS Report” means a document that sets out for the client a comparison of the

benefits likely (on reasonable assumptions) to be paid under the Ceding

Arrangement with the benefits afforded by the Proposed Arrangement, which

firms were required to carry out in accordance with COBS 19.1.2R (and prepare

in accordance with COBS 19.1.3R and 19.1.4R) prior to 1 October 2018.

4.
FACTS AND MATTERS

4.1.
Mansion Park was an independent financial adviser firm based in Ashby de la

Zouch, Leicestershire, which was authorised by the Authority on 15 May 2002.

During the Relevant Period Mansion Park had permission to carry on regulated

activities including advising on Pension Transfers, advising on investments and

arranging (bringing about) deals in investments.

4.2.
On 8 December 2017, the Authority visited Mansion Park’s offices. On 12

December 2017, following intervention by the Authority, Mansion Park applied for

the imposition of voluntary requirements, whereby Mansion Park would cease all

regulated activities relating to DBPS Pension Transfer business. Mansion Park

entered liquidation on 30 November 2020.

4.3.
During the Relevant Period, 19 advisers at Mansion Park provided DBPS Pension

Transfer advice, with second-level review and sign-off provided by 5 PTSs. In

some instances, those PTSs also advised clients directly.

4.4.
Mr Dickinson advised 135 (33%) of Mansion Park’s 400 DBPS Pension Transfer

customers during the Relevant Period, including 68 customer who were members

of the BSPS (representing 50% of the customers he advised in relation to DBPS

Pension Transfers during the Relevant Period). Mr Dickinson held initial meetings

with some customers after which the customer did not proceed through the advice

process, but all 135 customers who proceeded through the advice process were

advised by Mr Dickinson to transfer out of their DBPS.

4.5.
Mr Dickinson started working in the financial services industry in 1994 and has

held the AF3 (Pension Planning) qualification since October 2013, which enabled

him to practice as a qualified PTS throughout the Relevant Period. Prior to joining

Mansion Park, Mr Dickinson had limited experience as an independent financial

adviser and no experience as a PTS.

4.6.
Mr Dickinson joined Mansion Park on 6 April 2015. He held the CF30 (Customer)

controlled function at Mansion Park from 31 March 2015 to 6 April 2018, and the

CF1 (Director) controlled function from 26 April 2016 to 5 March 2018.

4.7.
Mr Dickinson was a key individual in the Pension Transfer advice process at

Mansion Park. He provided Pension Transfer advice to a large number of

customers, including a number of BSPS customers, and also provided second-

level review of Pension Transfer advice provided by other advisers. He was also a

CF1 Director who sat on the Mansion Park Board and attended meetings where

the Pension Transfer advice process was discussed.

4.8.
Mr Dickinson resigned from Mansion Park in April 2018.

4.9.
Pensions are a traditional and tax-efficient way of saving money for retirement.

The value of someone’s pension can have a significant impact on their quality of

life during retirement and, in some circumstances, may affect whether they can

afford to retire at all. Pensions are, in most cases, a primary resource for ensuring

financial stability in retirement. For some people, they are the only way of funding

retirement. Customers who engage authorised firms to provide them with advice

in relation to their pensions place significant trust in those providing the advice.

Where a financial adviser fails to conduct the affairs of their advice business in a

manner that is compliant with the Authority’s regulatory requirements, this

exposes their customers to a significant risk of harm.

4.10.
Pensions can be structured in a variety of ways. However, a DBPS is particularly

valuable because an employer sponsor carries the financial burden associated with

offering a secure, guaranteed income for life to members, which typically

increases each year in line with inflation. This is in contrast to, for example, a DC

pension scheme where employer and employee capital contributions are invested,

but the investment and mortality risk are borne by the member. The Authority

expects that for the majority of customers it is in their best interests to remain in

their DBPS because of the guarantees and protections it offers.

4.11.
Customers who engage advisers and authorised firms to provide them with advice

in relation to their pensions therefore place significant trust in them. It is

important that firms and their advisers exercise due skill, care and diligence when

advising customers regarding their pensions, ensuring that the advice given to a

customer is suitable for them, having regard to all of their relevant circumstances.

This is even more important when customers have no option but to make a

decision regarding their pension.

4.12.
Transfer out of a DBPS involves giving up the guaranteed benefits in exchange for

a Cash Equivalent Transfer Value (CETV) which is typically invested in a DC

pension. If a customer leaves a DBPS, they will have to buy an annuity to obtain

a guaranteed level of income. Alternatively, they may rely on income from

investments, but investments will have to be managed in such a way as to produce

ongoing income; and even then, there is no guarantee as to the amount or

duration of that income.

4.13.
The introduction of pensions freedoms (introduced in April 2015) for DC pensions

made transferring out of a DBPS an attractive option for some people. For

example, a customer who will not be reliant on the DBPS income in retirement

and who wishes to achieve a realistic objective attainable only once transfer has

been effected may be an example of a suitable candidate. However, as referenced

in COBS 19.1.6G, the Authority considers that, given the nature of the guaranteed

benefits provided under a DBPS, advisers’ default assumption should be that

transferring out and giving up those benefits is unlikely to be suitable for a

customer unless they can clearly show, based on a customer’s specific

circumstances, that it is in their best interests.

The British Steel Pension Scheme

4.14.
During the Relevant Period 68 (50%) of Mr Dickinson’s 135 DBPS Pension Transfer

customers were members of the BSPS.

4.15.
The BSPS was one of the largest DBPS in the UK, with approximately 125,000

members and £15 billion in assets as of 30 June 2017. In March 2017, the BSPS

was closed to future accruals, which meant that no new members could join it and

existing members could no longer build up their benefits. The BSPS also had an

ongoing funding deficit.

4.16.
In early 2016, various options were being explored in relation to the BSPS as a

result of insolvency concerns relating to one of its sponsoring employers. These

options included seeking legislative changes which would have allowed pension

increases available under the BSPS to be reduced to the statutory minimum levels,

and the sale of one of the sponsoring employers. However, it was concluded that

the only way to avoid insolvency would be to enter into a Regulated

Apportionment Arrangement (RAA).

4.17.
On 11 August 2017, the Pensions Regulator gave its clearance for the RAA. Under

the RAA, the BSPS would receive £550 million and a 33% equity stake in one of

the sponsoring employers and the BSPS would transfer into the PPF. In addition,

a new DBPS (BSPS 2) was proposed by the sponsoring employers in combination

with the RAA proposal. The RAA received formal approval on 11 September 2017,

which resulted in the BSPS being separated from the sponsoring employers.

4.18.
As a consequences of the RAA, members of the BSPS were required to make a

choice between two options offered by the BSPS, namely to either:

a) remain in the BSPS and therefore move into the PPF (suffering a 10% drop in

the value of their fund in doing so); or

b) transfer their benefits into BSPS 2.

4.19.
Alternatively, BSPS members could take a CETV and transfer their pension

benefits into an alternative pension arrangement (for example a personal pension

scheme or another occupational pension scheme held by the member).

4.20.
On 11 and 21 September 2017, the BSPS announced that it would separate from

the sponsoring employers, including the principal sponsor, Tata Steel UK.

Information about the options available to members was available on the BSPS’

website from 11 August 2017, and in October 2017, the BSPS distributed

information packs to members about these options. There were over 20 different

packs to take account of the different categories of members. The pack contained

individual estimates of BSPS 2 entitlements, generic information about PPF

compensation and comparisons between the two schemes. On the basis of this,

members were asked to decide whether they wanted to transfer their pension

rights to the new pension scheme, BSPS 2, which would be less generous than

the old scheme but more generous than PPF compensation for the majority of

members, or stay with the old scheme and move into the PPF. Members were

required to choose their preferred option by 22 December 2017. Those who

wanted to transfer their pension benefits from the BSPS to a personal pension

were required to submit the required paperwork to execute the transfer by 16

February 2018.

4.21.
The Rookes Review, an independent review of the support given to BSPS members

during the restructuring and “Time to Choose” exercise, stated that BSPS

members experienced, and were influenced by, a set of unique circumstances.

This included the following:

a) distrust of their employer;

b) limited information on alternative options;

c)
tight timescales to make a decision; and

d) limited support.

4.22.
Some BSPS members were in vulnerable circumstances. For example, BSPS

members tended to have no other assets and relied more on income from their

DBPS than members of other schemes.

Mansion Park’s Pension Transfer advice business and Mr Dickinson’s role

Initial and ongoing transfer fees / contingent fee arrangements

4.23. Mansion Park charged clients they were advising on their Pension Transfer a tiered

percentage of the CETV, if the recommendation was to transfer out of their DBPS

(as was the recommendation for all of Mansion Park’s 400 clients who proceeded

through the advice process during the Relevant Period, including each of the 135

clients Mr Dickinson advised). Mansion Park’s clients were not charged if the

adviser’s recommendation was not to proceed with the Pension Transfer, or if the

transfer did not take place.

4.24. The percentage fee ranged from 1.5-5% of the gross amount transferred, but the

typical fee charged was between 2% to 3% of the amount transferred. A lower

percentage fee was charged, on a sliding scale, for significant transfers above the

value of £300,000. An ongoing monthly adviser commission was also charged,

typically at 0.5% per annum of the fund invested. Mr Dickinson received

£732,354 resulting from the transfer of customers’ pensions out of their DBPS in

reliance on his advice during the Relevant Period.

Increase in DBPS work at Mansion Park

4.25. Mansion Park acquired permission to provide Pension Transfer advice in May 2002.

From early 2017, Mansion Park began to receive a significant increase in Pension

Transfer enquiries.

The Pension Transfer Advice Process

4.26. According to Mansion Park’s documents setting out the process which was

purportedly in place during the Relevant Period, Mansion Park’s Pension Transfer

advice process was as follows:

a) following an initial call, an introductory discussion would take place at a face-

to-face meeting about the customer’s aims and objectives and the options

available. At this meeting, the adviser would complete a fact find, take further

notes and complete and exchange other documents with the customer.

Following that initial discussion, some customers decided not to proceed

further and therefore did not receive advice; and

b) where a customer wished to proceed following the face-to-face meeting, the

adviser would then request information from the customer’s Ceding

Arrangements and investment research would be conducted to provide a basis

for the advice. Research would be uploaded to a customer file and reviewed

and a TVAS and Suitability Report would be prepared.

PTS file check

4.27. In response to the growing levels of DBPS Pension Transfer advice business that

Mansion Park was undertaking and concerns that there was no PTS in the

Compliance Team, Mansion Park added a step to the process whereby Pension

Transfer advice would be submitted for “double sign off by PTS”, and advice could

not be provided to clients without first being reviewed by a PTS. Mansion Park had

five PTS’ during the Relevant Period, one of which would be assigned to review

each file.

4.28.
The advice process was the same whether the primary adviser providing Pension

Transfer advice to the client was a PTS or not, except that if the primary adviser

was a non-PTS, then from 23 May 2016, following the first client meeting they

would hold an initial discussion with the PTS to discuss the merits of proceeding

to the advice stage.

4.29.
Once the information gathering steps described at paragraph 4.26 above had been

completed, the file would then be passed to a PTS for their review. The PTS

communicated any remedial work they thought needed to be undertaken (for

example, if further information was needed from the customer) to the adviser by

email or telephone, and would check the file again after the remedial work had

been completed. The PTS would not communicate directly with the customer as

part of the review process.

4.30. Other than discussions which arose in the course of Board and Investment

Committee meetings, PTSs did not meet to discuss issues or risks which might

have arisen in the Pension Transfer advice process.

Mansion Park’s compliance arrangements

4.31. Once the advice had been finalised and the PTS review had been completed, a

customer file would be sent to Mansion Park’s Compliance department to review

the file. The Compliance team did not include any PTSs. Compliance would deal

directly with the adviser if there were any queries. Once Compliance had reviewed

the file, the adviser would visit the client to present the Personal Recommendation

and discharge the obligations in COBS 19.1.2R(3) and (4), to explain the TVAS

Report to the customer and take reasonable steps to ensure that they understood

the TVAS Report and the advice.

4.32.
Occasionally, Compliance would seek external assistance in relation to the firm’s

pension advice process. In August 2017, Mansion Park obtained an external report

on its Pension Transfer advice process. In summary, the report concluded that

Mansion Park’s processes around Pension Transfer advice were “basically sound

and robust”. The report assessed 1 customer file in which Mr Dickinson was

primary adviser, as well as some other aspects of the DBPS Pension Transfer

advice process. The file reviewed was considered unclear, as it was found that

“[f]urther information is required before an opinion on suitability can be issued”.

Adherence to the advice process

4.33.
In autumn 2017, Mansion Park held several discussions with Mr Dickinson

regarding his adherence to internal policies and procedures, and the quality of

advice he had provided. In October 2017, 6 of Mr Dickinson’s files were sent for

external review. For all 6 files, the suitability of advice was rated as unclear.

4.34.
Additionally, although Mansion Park explained that the advice process explained

above was in place during the Relevant Period, the Authority’s feedback letter to

the firm dated 8 February 2018 (following the visit on 8 December 2017) identified

some concerns that the process was not being adequately followed, including by

Mr Dickinson.

Mr Dickinson’s approach to advice on Pension Transfers

4.35.
Mr Dickinson stated at interview that he was unaware of the starting point in COBS

19.1.6G, which is that when advising on a potential Pension Transfer out of a

DBPS, a firm should start by assuming that such a transfer would not be suitable.

Mr Dickinson has since stated that he was aware of this premise, but that the

advice process at Mansion Park which he followed was heavily weighted towards

a customer’s aims, objectives and personal situation. Mr Dickinson also stated

that he was an inexperienced PTS who was not sufficiently trained or supervised

to give DBPS Pension Transfer advice at Mansion Park, and that he would have

relied on Compliance to advise him of the Authority’s rules. The Authority’s view

is that a reasonably competent PTS should have been aware of this starting point

and that Mr Dickinson’s lack of knowledge, or alternatively awareness of the

significance of, this point led to him adopting his own, incorrect starting point,

which was based on customers’ objectives.

4.36.
Mr Dickinson portrayed the BSPS 2 to clients as a “zombie scheme”, which

according to him meant that “British Steel would have no liability to the Scheme”

and that the Scheme was in deficit. Of the Sample Files where Mr Dickinson was

the primary adviser, 5 related to BSPS customers. The Authority’s view is that in

advising these customers, Mr Dickinson started with a presumption that the

customer should transfer out and exhibited a general lack of consideration of the

alternatives to transferring out of the Ceding Arrangement. In particular, the risks

associated with the PPF were overstated, and the advantages were underplayed.

4.37.
Mr Dickinson also did not provide sufficient challenge to customer opinions and

objectives during the advice process. He was of the view that BSPS members

generally were very concerned about the options available to them and the risk

of their pension falling into the PPF. The information recorded on customer files

noted that customers had expressed concerns about the level of uncertainty and

the reduction in the size of the funds payable to those drawing upon their pension

under the BSPS 2. The Suitability Reports in all of the 5 BSPS files reviewed by

the Authority used the same templated wording in respect of BSPS 2, which read

“I would understand why you wish to transfer your benefits to a Personal

Pension/Stakeholder plan based on your current circumstances and will advise

you accordingly.”

4.38.
Mr Dickinson’s approach to advice meant that he recommended a transfer out of

a customer’s DBPS primarily on the opinion of the customer and without an

objective assessment of whether it was in the customer’s best interests. At

interview, when asked about whether a transfer would be suitable if the

customer’s objectives could be met by staying in the existing scheme, even if the

customer was willing to take the investment risk, Mr Dickinson responded that it

would depend on the customer’s objectives.

4.39. Whilst it was appropriate for Mr Dickinson to have regard to a customer’s stated

objectives, he was required to ensure that he explained the benefits of the DBPS

and provide suitable advice to customers, taking into account all of their

circumstances. If he was of the view that a transfer out of the DBPS was not in

the best interests of the customer, even if that meant certain of the customer’s

stated objectives could not be achieved, then he should not have recommended

a transfer.

The Authority’s Review of Mr Dickinson’s advice

Review of a sample of files

4.40.
Following a visit to Mansion Park on 8 December 2017, the Authority requested

and assessed a sample of 21 of Mansion Park’s customer files (the Sample Files).

Of the Sample Files, 7 had been advised by Mr Dickinson, all of which involved a

completed Pension Transfer. 5 of the 7 Pension Transfers were for customers who

were BSPS members. Although Mr Dickinson was a second level reviewer for some

of Mansion Park’s files, he was not a second level reviewer in any of the Sample

Files.

4.41.
The review of the 7 of the Sample Files where Mr Dickinson was the primary

adviser was carried out using the Defined Benefit Advice Assessment Tool

(DBAAT) and found that Mr Dickinson had:

a) failed to collect all required information to give Pension Transfer advice in all

7 cases. In 1 case the absence of information was so significant that the

Authority was unable to assess whether Mr Dickinson’s advice was suitable

(see “Information collection failures” below);

b) given unsuitable Pension Transfer advice in 6 out of the 7 cases. In the 7th

case, suitability could not be assessed because of material information gaps.

In 4 out of the 6 cases assessed for suitability, the customers were members

of the BSPS (see “Unsuitable Pension Transfer advice” below); and

c)
given unsuitable investment advice in 4 out of the 7 cases (see ”Unsuitable

investment advice” below).

4.42.
The average transfer value for the 6 customers who received unsuitable Pension

Transfer advice, and the 1 customer where there was insufficient information for

suitability to be assessed, was £303,919.30. In most of these customer files, the

customer’s DBPS was their most significant asset by some measure. These

customers had very limited financial resources available to them to protect them

from any downturn in their finances and could not be described as financially

resilient.

Information Collection failures

4.43.
During the Relevant Period, COBS 9.2.1R stated that a firm must take reasonable

steps to ensure that a Personal Recommendation (which included, in this context,

a recommendation to transfer or not to transfer a pension) was suitable for its

customer (COBS 9.2.1R, see Annex A).

4.44.
When making a Personal Recommendation, a firm must first obtain the necessary

information regarding the customer’s: (a) knowledge and experience in the

investment field relevant to the Pension Transfer; (b) financial situation; and (c)

investment objectives.

4.45.
COBS 9.2.2R stated that a firm must obtain from the customer such information

as is necessary for the firm to understand the essential facts about them and have

a reasonable basis for believing, giving due consideration to the nature and extent

of the service provided, that the specific transaction to be recommended, or

entered into in the course of managing: (a) meets their investment objectives;

(b) is such that they are able financially to bear any related investment risks

consistent with their investment objectives; and (c) is such that they have the

necessary experience and knowledge in order to understand the risks involved in

the transaction or in the management of their portfolio.

4.46.
COBS 9.2.6R stated that if a firm did not obtain the necessary information to

assess suitability, it must not make a Personal Recommendation. Making a

Personal Recommendation without the necessary information increases the risk

of providing unsuitable Pension Transfer advice.

Failure to collect necessary information to assess suitability of the proposed

4.47.
In 1 out of the 7 Sample Files in which Mr Dickinson was the primary adviser, Mr

Dickinson made a Personal Recommendation without having gathered the

necessary information to assess suitability of the proposed Pension Transfer. In

this case, Mr Dickinson failed to capture information regarding the customer’s

financial situation including information regarding additional pensions held by the

customer and their spouse and information regarding the spouse’s rental property

was not included in retirement income modelling, such that a proper and accurate

assessment of reliance on the DBPS could not be undertaken. This put the

customer at risk of receiving unsuitable advice.

Additional information collection failures

4.48.
In addition to the case where the absence of necessary information meant that

an assessment could not properly be made, and therefore suitability could not be

demonstrated by Mr Dickinson, there was a failure to collect necessary information

in the remaining 6 of the Sample Files where Mr Dickinson was the primary

adviser. For example:

a) in 3 out of the 7 Sample Files, information regarding the customer’s wider

financial situation was missing, including details of additional pensions held

by the customer and their spouse; and

b) in 2 out of the 7 Sample Files, there was a failure to obtain and discuss some

aspects of the customer’s income needs and expenditure in retirement,

including their basic living costs, lifestyle expenditure and discretionary

expenditure. Consequently, Mr Dickinson was not able to assess how the

DBPS would be utilised by each of these customers during retirement.

4.49.
Despite the absence of complete information for these customer files, the

Authority was able to assess transfer suitability by making reasonable

assumptions or inferences as to the missing information. All of these files were

assessed by the Authority as containing unsuitable transfer advice.

Unsuitable pension transfer advice

4.50.
The Authority’s review of the 7 of the Sample Files where Mr Dickinson was

primary adviser found that 6 customers (85%) received unsuitable Pension

Transfer advice. The Authority was unable to assess whether the Pension Transfer

advice provided to 1 of the 7 customers was suitable due to material information

gaps. Of the 6 customers who received unsuitable Pension Transfer advice, 4 were

former BSPS members.

4.51.
The Authority found that Mr Dickinson’s Pension Transfer advice was unsuitable

for a variety of reasons (see below). Some of the files reviewed contained advice

which was found to be unsuitable for multiple reasons.

Reliance on the DBPS and inability to bear transfer risk

4.52.
The Authority assessed the customer as being reliant on the Ceding Arrangement

in all 6 of Mr Dickinson’s files which could be assessed for suitability. A customer

was considered by the Authority to be reliant on income from the Ceding

Arrangement in retirement if it would be their primary income source with no

capacity to bear the risk of losing it; for example, because without it they would

be unable to meet non-discretionary expenditure.

4.53.
For example:

a) at the time of receiving advice from Mr Dickinson, Customer E was aged 55

and their spouse was aged 53. The customer held no savings or investments

and stated that they had “limited” disposable income available each month.

Mr Dickinson did not complete a budget planner or capture the customer’s

actual income or anticipated expenditure requirements in retirement;

b) their investment objectives were to take the maximum PCLS immediately to

pay for home repairs and improvements and then to leave the residual fund

invested over the medium to long term, in addition to maximising the value

of the benefits payable upon their death; and

c)
Mr Dickinson did not demonstrate the basis for believing that the customer

was financially able to bear the risk of a Pension Transfer, including losing the

guaranteed income from their DBPS, consistent with their objectives, or that

it was in their best interests to prioritise their stated investment objectives at

the expense of their income needs during retirement. Mr Dickinson should

have known that following the recommended Pension Transfer, the

customer’s retirement income would depend on the performance of the

investment in the Proposed Arrangement.

Failure to demonstrate transfer to achieve customers’ objectives was in their best

interests

4.54. COBS 19.1.6G indicates that a firm should only consider a Pension Transfer to be

suitable if it can clearly demonstrate, on contemporary evidence, that the transfer

is in the client’s best interests. Mr Dickinson failed to demonstrate that the specific

customer objectives which drove the Pension Transfer (for example, a wish to

maximise their death benefits) meant that the transfer would be in the customer’s

best interests.

4.55.
The Authority considers that the primary purpose of a pension is to meet the

income needs of an individual in retirement. Where a customer expresses a strong

wish to maximise their death benefits, or to increase the flexibility of alternative

arrangements, there is an increased risk that this will undermine the primary

purpose of their pension. A balance therefore needs to be achieved between these

objectives, which is in the best interests of the customer given their circumstances

(COBS 9.2.1R(1) and 9.2.2R(1)(b)).

4.56.
In the Authority’s file review there were several examples where the customer

expressed a wish to maximise their death benefits and/or a need for increased

flexibility, and they were advised to complete a Pension Transfer. However, the

information in those files did not adequately demonstrate that the customer’s

demands and needs had been properly tested, or that a Pension Transfer was in

the customer’s best interests.

4.57.
For example:

a) Customer A expressed a desire for control and flexibility over their pension.

However, it was not apparent from the customer’s financial circumstances or

requirements that transferring out of their DBPS was otherwise in their best

interests;

b) Customer A also listed early retirement as an objective. The interplay between

this objective and reliance on the DBPS’s guaranteed income was not

considered in the assessment contained in the Suitability Report. Because

this analysis was not completed, it was unclear whether this objective was

realistic or affordable;

c)
in the case of Customer E, Mr Dickinson recommended that the customer

transfer out of their DBPS, with the intention that the customer would take

flexible benefits that would allow them to access the required PCLS. Mr

Dickinson had not carried out any type of assessment of the customer's

realistic income needs during retirement;

d) maximing death benefits appeared as an objective in some of the files

reviewed by the Authority in which Mr Dickinson was the primary adviser. No

consideration was given as to how this objective could be met without transfer

out of the DBPS; and

e)
several BSPS customers expressed concerns regarding the options available

to them and the risk of their pension falling into the PPF. Mr Dickinson failed

to explore customers’ concerns about the available options and consider what

weight should be attached to them given the customer’s particular

circumstances, and the advice he provided in the files reviewed by the

Authority exhibited a general lack of consideration of the alternatives to

transferring out of the Ceding Arrangement. In particular, the risks associated

with the PPF were overstated and its advantages were underplayed.

4.58.
In the files reviewed by the Authority, Mr Dickinson did not demonstrate how he

had balanced customers’ objectives, such as those set out above, and the need

for their pensions to meet their income needs during retirement, in advising them

to proceed to transfer out of their DBPS. Instead, Mr Dickinson set out in generic

terms the disadvantages of the Pension Transfer, and balanced this with the

customer’s purported level of knowledge as a means of justifying the transfer. As

a result, Mr Dickinson failed to analyse and present findings as to why, for the

customer in question, weighing the competing factors, the recommendation to

transfer out was in the customer’s best interests.

Lack of necessary attitude to transfer risk and lack of knowledge and experience

4.59.
Mr Dickinson was required to obtain information on the customer’s preferences

regarding risk-taking and their risk profile (COBS 9.2.2R) to ensure that the

customer was prepared to exchange the guaranteed benefits of the DBPS for non-

guaranteed benefits which are subject to investment risk borne by the customer).

Mr Dickinson was also required to obtain sufficient information to provide a

reasonable basis for believing that the customer had the necessary experience

and knowledge to understand the risks involved in the Pension Transfer (COBS

4.60.
In some of the files, it was unclear whether the customer had the necessary

attitude to transfer risk to support the advice to transfer out of their DBPS. For

a) for Customer F, the mismatch between the customer’s low Attitude to Risk

and the risks associated with transferring out of the Ceding Arrangement

created a contradictory impression in the Suitability Letter. The letter stated

“you are happy to accept a greater degree of risk in exchange for the

possibility of a higher pension in retirement”, but then confirmed that the

customer “agreed” they were a low-risk investor; and

b) Customer C did not appear to have the necessary Attitude to Risk to support

a transfer out of their DBPS. The customer also had very little knowledge and

experience of investing and the risk profile questionnaire indicated that they

were a ‘low’ risk-taker. There was no evidence of discussions between Mr

Dickinson and the customer to validate the customer’s understanding of the

risks and why they were prepared to give up the guaranteed benefits provided

by their DBPS.

4.61.
Mr Dickinson failed to demonstrate that the customer had sufficient knowledge to

understand the risks of transfer in 4 out of the 7 Sample Files reviewed by the

Authority for which he was the primary adviser. The information contained in the

files often showed that the customer lacked experience, whereas Mr Dickinson did

not assess them to be inexperienced.

4.62.
In some of the Suitability Reports, Mr Dickinson recorded only that the customer

had little experience but some understanding, without recording how he had

formed a reasonable basis for believing that the customer had the necessary

experience and knowledge to understand the risks involved in the Pension

Transfer (COBS 9.2.2R). Where the customer had asserted a level of knowledge

when their investment experience suggested otherwise, there was no evidence of

Mr Dickinson challenging or scrutinising these answers. Instead, he relied on his

own impression of the customer’s understanding, rather than carrying out an

objective assessment, even when the customer had no investment experience at

all, with very limited savings. This exposed customers to significant risk.

4.63.
In order to provide Pension Transfer advice, Mansion Park was obliged to carry

out a comparison between the benefits likely to be paid by the DBPS with the

benefits afforded by a personal pension. A TVAS Report facilitates this comparison

as required by COBS 19.1.2R(1). The main output from this document is a series

of percentages, known as Critical Yields. These illustrate the annual growth rate

(net of charges) that the customer would need to obtain on an investment of the

CETV in order to replicate the benefits provided by the Ceding Arrangement. The

firm must ensure that the comparison included enough information for the

customer to be able to make an informed decision, drawing the customer's

attention to factors that both support and detract from the firm’s advice, and take

reasonable steps to ensure that the client understands the comparison and advice

(COBS 19.1.2(2) – (4)).

4.64.
Mr Dickinson failed to follow this guidance in 3 out of the 6 cases which could be

assessed for suitability by the Authority. Mr Dickinson failed to fairly present the

comparison or take into account the customer’s objectives so as to make the

comparison useful to the customer. Errors included not carrying out analysis for

customers’ Preferred Retirement Dates and not taking account of tax-free cash

being taken, creating the risk that incorrect Critical Yield figures were then

provided to the customer. Where calculated to a higher retirement age than

desired by the customer, the Critical Yield figure will be lower, suggesting the

receiving fund does not need to perform as well. This created a misleading picture

about how the Ceding Arrangement and the Proposed Arrangement compared,

resulting in the customer not being in a properly informed position with regard to

the decision they were making.

4.65.
In the 3 files reviewed by the Authority for which Mr Dickinson carried out

inadequate analysis in the TVAS Report, his advice was deemed unsuitable by the

Authority because, in each instance, he advised customers to transfer out of their

DBPS despite the content of the TVAS Report and its Critical Yield calculations not

supporting the recommendation to proceed with the Pension Transfer.

4.66.
The TVAS Reports and fund illustrations in 6 out of the 7 files reviewed by the

Authority for which Mr Dickinson was the primary adviser did not include sufficient

information to enable customers to make informed decisions regarding whether

to transfer out of their DBPS into the Proposed Arrangement.

Unsuitable investment advice

4.67.
The suitability requirement in COBS 9.2.1R extends to the investment into which

the firm has recommended the customer should transfer their pension funds. Just

as the adviser must consider whether the customer can bear the transfer risk,

they must also have a reasonable basis for believing that the customer can bear

the risks associated with the chosen investment (COBS 9.2.1R(1)(a) and COBS

9.2.2R(1)(b)). In 4 out of the 7 files reviewed by the Authority for which Mr

Dickinson was the primary adviser, the Authority found that the investment advice

provided was unsuitable, for reasons including that the customers did not have

the capacity to bear the investment risk associated with the Proposed

Arrangement. The Authority was unable to assess 1 of the 7 files due to material

information gaps.

Poor quality communications with customers

4.68.
The Authority’s Rules about the provision of information to customers ensure that

consumers have all the necessary information to make an informed decision and

are, ultimately, treated fairly. Mr Dickinson failed to comply with the Authority’s

Rules in all 7 of the files reviewed by the Authority for which he was the primary

adviser. Suitability Reports were not compliant with rules set out in COBS in all of

the 7 of the Sample Files reviewed were Mr Dickinson was the primary adviser.

4.69.
Additionally, Mr Dickinson did not take steps to ensure the customer understood

the comparison between the benefits likely to be paid and options available under

the Ceding Arrangement and those benefits and options available under the

Proposed Arrangement, as set out in the TVAS Reports.

5.
FAILINGS

5.1.
The regulatory provisions relevant to this Notice are referred to in Annex A.

5.2.
Mr Dickinson breached Statement of Principle 2 during the Relevant Period, in that

he failed to act with due skill, care and diligence when advising customers on

Pension Transfers in his capacity as a PTS performing the CF30 (Customer)

controlled function. His failings meant that the advice he provided did not comply

with regulatory requirements and standards, which created a significant risk that

his advice that a customer should transfer out of their DBPS would not be suitable

for them.

5.3.
In particular, Mr Dickinson:

a) gave unsuitable Pension Transfer advice because he based Personal

Recommendations on the incorrect assumption that a transfer to meet the

customer’s stated objectives was in the customer’s best interests. In reality,

many customers’ objectives were either not realisable or financially viable, or

could have been met by the existing scheme;

b) failed to assess, or give due consideration to, whether customers would be

reliant on the income from their DBPS or whether they could financially bear

the risks involved in a Pension Transfer. He did this despite knowing that,

following the recommended transfer, customers’ retirement income would be

dependent on the performance of the new investment;

c)
advised clients with no source of retirement income other than their DBPS

and state pension, and who had cautious attitudes to risk, to give up their

guaranteed benefits without sufficient justification;

d) failed properly to assess whether the customer had the necessary experience

and knowledge to understand the risks involved in the Pension Transfer

recommended, and failed to give due consideration to this where they did

not;

e)
failed to undertake adequate transfer analysis to compare the benefits likely

to be paid under the DBPS with benefits paid out under the Proposed

Arrangement or other pension scheme into which it was proposed that the

client should transfer.; and

f)
failed to ensure his Suitability Reports contained adequate information about

the possible disadvantages of transferring out of the customer’s DBPS, having

regard to their specific circumstances and objectives. Although Suitability

Reports contained caveats and risk warnings regarding Pension Transfers, the

Authority considers that the Personal Recommendation was unclear and

risked being confusing for customers. The warnings and Personal

Recommendation to transfer were often contradictory, with no explanation.

5.4.
As a consequence of his actions, Mr Dickinson failed to meet the regulatory

standards applicable to a PTS performing the CF30 controlled function. The

Authority therefore considers that he is not fit and proper to perform any function

in relation to the regulated activity of advising on Pension Transfers and Pension

opt-outs carried on by an authorised person, exempt person and exempt

professional firm.

6. SANCTION

Financial penalty

6.1.
The Authority’s policy for imposing a financial penalty is set out in Chapter 6 of

DEPP. In respect of conduct occurring on or after 6 March 2010, the Authority

applies a five-step framework to determine the appropriate level of financial

penalty. DEPP 6.5B sets out the details of the five-step framework that applies in

respect of financial penalties imposed on individuals in non-market abuse cases.

Step 1: disgorgement

6.2.
Pursuant to DEPP 6.5B.1G, at Step 1 the Authority seeks to deprive an individual

of the financial benefit derived directly from the breach where it is practicable to

quantify this.

6.3.
Mr Dickinson derived direct financial benefit from the commissions generated from

customers who transferred out of their DBPS as a result of unsuitable advice

provided by him. Mr Dickinson received £274,178.59 in fees from Pension

Transfers he advised on during the Relevant Period after tax and expenses directly

referable to the misconduct.

6.4.
100% of Mr Dickinson’s Pension Transfer advice in the Sample Files did not comply

with the Authority’s Rules (86% of the files contained unsuitable Pension Transfer

advice and 14% of files had material information gaps such that a Personal

Recommendation should not have been given). However the Authority also

received parts of 4 customer files for which Mr Dickinson was the adviser which

were not assessed using the DBAAT and on which no findings have been made in

relation to suitability. The Authority therefore seeks to disgorge from Mr Dickinson

63% of the fees he received which relate to DBPS Pension Transfer advice. This

is £172,732.51.

6.5.
The Authority has charged interest on Mr Dickinson’s benefits at 8% per year from

the end of the Relevant Period to 4 April 2023, amounting to £73,181.80.

6.6.
Step 1 is therefore £245,914 (rounded down to the nearest £1).

Step 2: the seriousness of the breach

6.7.
Pursuant to DEPP 6.5B.2G, at Step 2 the Authority determines a figure that

reflects the seriousness of the breach. That figure is based on a percentage of

the individual’s relevant income. The individual’s relevant income is the gross

amount of all benefits received by the individual from the employment in

connection with which the breach occurred, and for the period of the breach.

6.8.
The period of Mr Dickinson’s breach of Statement of Principle 2 was from 8 June

2015 to 17 December 2017. Mr Dickinson’s relevant income for this period was

£789,507.04.

6.9.
In deciding on the percentage of the relevant income that forms the basis of the

step 2 figure, the Authority considers the seriousness of the breach and chooses

a percentage between 0% and 40%. This range is divided into five fixed levels

which represent, on a sliding scale, the seriousness of the breach; the more

serious the breach, the higher the level. For penalties imposed on individuals in

non-market abuse cases there are the following five levels:

Level 1 – 0%

Level 2 – 10%

Level 3 – 20%

Level 4 – 30%

Level 5 – 40%

6.10.
In assessing the seriousness level, the Authority takes into account various factors

which reflect the impact and nature of the breach, and whether it was committed

deliberately or recklessly. DEPP 6.5B.2G(12) lists factors likely to be considered

‘level 4 or 5 factors’. Of these, the Authority considers the following factors to be

relevant.

Impact of the Breach

6.11.
Mr Dickinson gained a significant, direct benefit from the misconduct identified in

this Notice, due to the commissions he received resulting from the transfer of

customers’ pensions out of their DBPS in reliance on his advice (DEPP

6.5B.2G(8)(a)).

6.12.
Mr Dickinson’s breaches caused a significant risk of loss, as a whole, to consumers

who transferred out of their DBPS as a result of his advice. The total value of the

transferred funds on which Mr Dickinson gave advice was £39,032,439.7. Mr

Dickinson’s breaches placed these clients’ funds at significantly increased risk of

loss (DEPP 6.5B.2G(8)(b)).

6.13.
Mr Dickinson’s breaches caused a significant risk of loss to individual consumers

who transferred out of their DBPS as a result of his unsuitable advice. For many

customers, their DBPS was their most valuable asset (the average CETV per

customer was £240,562.23) and was, for many customers, their main retirement

provision (DEPP 6.5B.2G(8)(c)).

6.14.
Some of Mr Dickinson’s customers were BSPS members, many of whom were in

a vulnerable position due to the uncertainty surrounding the future of the BSPS.

(DEPP 6.5B.2G(8)(d)).

Nature of the Breach

6.15.
The breach was a continuous one during the Relevant Period of over two years.

(DEPP 6.5B.2G(9)(b)).

6.16.
Ms Dickinson is an experienced financial industry professional and a PTS (DEPP

6.5B.2G(9)(j)).

Whether the breach was deliberate and/or reckless

6.17.
The breaches committed by Mr Dickinson were as a result of his serious lack of

competence, rather than deliberate or reckless acts (DEPP 6.5B.2G(11)).

Level of Seriousness

6.18.
DEPP 6.5B.2G(12) lists factors likely to be considered ‘level 4 or 5 factors’. The

Authority considers that the fact that Mr Dickinson’s breach caused a significant

risk of loss to customers is relevant (DEPP 6.5B.2G(12)(a)).

6.19.
DEPP 6.5B.2G(13) lists factors likely to be considered ‘level 1, 2 or 3 factors’. The

Authority considers that the fact that Mr Dickinson committed his breach

negligently to be relevant (DEPP 6.5B.2G(13)(d)).

6.20.
Taking all of these factors into account, the Authority considers the seriousness

of the breach to be level 3 and so the Step 2 figure is 20% of £789,507.04.

6.21.
Step 2 is therefore £157,901.04.

Step 3: mitigating and aggravating factors

6.22.
Pursuant to DEPP 6.5B.3G, at Step 3 the Authority may increase or decrease the

amount of the financial penalty arrived at after Step 2, but not including any

amount to be disgorged as set out in Step 1, to take into account factors which

aggravate or mitigate the breach.

6.23.
The Authority has considered whether any of the mitigating or aggravating factors

listed in DEPP 6.5B.3G, or any other such factors, apply in this case and has

concluded that none applies to a material extent, such that the penalty ought to

be increased or decreased.

6.24.
The step 3 figure is therefore £157,901.04.

Step 4: adjustment for deterrence

6.25.
Pursuant to DEPP 6.5B.4G, if the Authority considers the figure arrived at after

Step 3 is insufficient to deter the individual who committed the breach, or others,

from committing further or similar breaches, then the Authority may increase the

penalty.

6.26.
The Authority considers that the Step 3 figure of £157,901.04 represents a

sufficient deterrent to Mr Dickinson and others, and so has not increased the

penalty at Step 4.

6.27.
Step 4 is therefore £157,901.04.

Serious financial hardship

6.28.
Pursuant to DEPP 6.5D.4G, the Authority will consider reducing the amount of a

penalty if an individual will suffer serious financial hardship as a result of having

to pay the entire penalty. The Authority accepts that the payment of any penalty

in addition to the disgorgement amount of £245,914 would cause Mr Dickinson

serious financial hardship. The Authority has therefore reduced the punitive

element of the penalty to £0.

Conclusion on financial penalty

6.29.
Having applied the five-step framework set out in DEPP, the appropriate level of

financial penalty to be imposed on Mr Dickinson is £245,914.

6.30.
The Authority would have imposed a financial penalty of £403,814 on Mr Dickinson

(reduced to £245,914 as Mr Dickinson has provided verifiable evidence that

payment of the full amount of the financial penalty would cause him serious

financial hardship). However, the Authority recognises that there is a significant

liability for redress for Mansion Park’s customers which has fallen to the FSCS. As

at 17 March 2023, the FSCS has paid out £2,988,898.02 in compensation to

customers of Mansion Park. Had it not been for the compensation limit of £85,000,

the total compensation available to customers would have been £5,322,495.71.

In these circumstances, the Authority has agreed with Mr Dickinson that in lieu of

the imposition of a financial penalty, the sum of £70,000 be paid direct to the

FSCS to contribute towards any redress due to Mansion Park’s customers. This is

in furtherance of the Authority’s consumer protection objective. In light of the

above and taking into account the exceptional circumstances of the BSPS, the

Authority hereby publishes a statement of Mr Dickinson’s misconduct.

6.31.
The Authority’s policy in relation to the imposition of a public censure is set out in

Chapter 6 of DEPP. DEPP sets out non exhaustive factors that may be of particular

relevance in determining whether it is appropriate to issue a public censure rather

than impose a financial penalty. DEPP 6.4.2G (5) includes that it may be a factor

(depending on the nature and seriousness of the breach) in favour of a public

censure rather a financial penalty including but not limited to where a person has

taken steps to ensure that those who have suffered loss due to the breach are

fully compensated for those losses. Whilst the full amount of any losses due to Mr

Dickinson’s breaches are not yet quantified, they may be significant. In light of

this, and the FSCS having already paid out £2,988,898.02 to Mansion Park’s

customers, the Authority has agreed that the sum of £70,000 should be paid direct

to the FSCS.

6.32.
The Authority has had regard to the fact that Mr Dickinson has agreed to pay

direct to the FSCS assets that would otherwise be used to satisfy any financial

penalty imposed by the Authority to be used towards any redress due to Mansion

Park’s customers. On that basis, the Authority does not propose to impose a

financial penalty on Mr Dickinson but instead hereby issues a statement of Mr

Dickinson’s misconduct under section 66 of the Act.

6.33.
The Authority has had regard to the guidance in Chapter 9 of EG in considering

whether to impose a prohibition order on Mr Dickinson. The Authority has the

power to prohibit individuals under section 56 of the Act.

6.34.
The Authority considers that Mr Dickinson lacks fitness and propriety in all the

circumstances, in particular relating to his lack of competence and capability for

the reasons set out above. Therefore, the Authority considers it appropriate and

proportionate in all the circumstances to prohibit Mr Dickinson from performing

any functions in relation to the regulated activity of advising on Pension Transfers

and Pension Opt-Outs carried on by an authorised person, exempt person or

exempt professional firm.

7. PROCEDURAL MATTERS

7.1.
This Notice is given to Mr Dickinson under sections 57 and 67 of the Act and in

accordance with the section 390 of the Act.

7.2.
The following statutory rights are important.

Decision maker

7.3.
The decision which gave rise to the obligation to give this Notice was made by

the Settlement Decision Makers.

7.4.
Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of

information about the matter to which this Notice relates. Under those provisions,

the Authority must publish such information about the matter to which this Notice

relates as the Authority considers appropriate. The information may be published

in such manner as the Authority considers appropriate. However, the Authority

may not publish information if such publication would, in the opinion of the

Authority, be unfair to you or prejudicial to the interests of consumers or

detrimental to the stability of the UK financial system.

7.5.
The Authority intends to publish such information about the matter to which this

Final Notice relates as it considers appropriate.

Authority contacts


7.6.
For more information concerning this matter generally, contact Lisa Ablett at the

Authority (direct line: 020 7066 9886/email: Lisa.Ablett@fca.org.uk).

Financial Conduct Authority, Enforcement and Market Oversight Division

ANNEX A

RELEVANT STATUTORY AND REGULATORY PROVISIONS

The Financial Services and Markets Act 2000 (“the Act”)

The Authority’s operational objectives

1.
The Authority’s operational objectives are set out in section 1B(3) of the Act

and include securing an appropriate degree of protection for consumers and

protecting and enhancing the integrity of the UK financial system.

Section 56 of the Act

2.
Section 56 of the Act provides that the Authority may make an order prohibiting

an individual from performing a specified function, any function falling within a

specified description or any function, if it appears to the Authority that that

individual is not a fit and proper person to perform functions in relation to a

regulated activity carried on by an authorised person, a person who is an

exempt person in relation to that activity or a person to whom, as a result of

Part 20, the general prohibition does not apply in relation to that activity. Such

an order may relate to a specified regulated activity, any regulated activity

falling within a specified description, or all regulated activities

Section 66A of the Act

3.
Under section 66A of the Act, the Authority may take action against a person

if it appears to the Authority that he is guilty of misconduct and the Authority

is satisfied that it is appropriate in all the circumstances to take action against

him, including the imposition of a penalty of such amount as it considers

appropriate.

4.
Under section 66A of the Act a person is guilty of misconduct if, inter alia, he

at any time failed to comply with rules made by the Authority under section

64A of the Act and at that time was an approved person or had been knowingly

concerned in a contravention of relevant requirement by an authorised person

and at that time the person was an approved person in relation to the

authorised person.

RELEVANT REGULATORY PROVISIONS

The Authority’s Handbook of Rules and Guidance

5.
In exercising its powers to impose a financial penalty, the Authority must have

regard to the relevant regulatory provisions in the Authority’s Handbook of

rules and guidance (the “Handbook”). The main provisions that the Authority

considers relevant are set out below.

Statements of Principle and Code of Practice for Approved Persons

(“APER”)1

6.
The part of the Authority’s handbook known as APER sets out the Statements

of Principle issued under section 64 of the Act as they relate to approved

persons and descriptions of conduct which, in the opinion of the Authority, do

not comply with a Statement of Principle.

7.
APER further describes factors which, in the opinion of the Authority, are to be

taken into account in determining whether or not an approved person’s conduct

complies with particular Statements of Principle.

8.
Statement of Principle 2 states that:

An approved person must act with due skill, care and diligence in carrying

out his accountable functions.

9.
APER 3.2.1E states that:

In determining whether or not the particular conduct of an approved person

within their accountable function complies with the Statements of Principle,

the following are factors which, in the opinion of the Authority, are to be

taken into account:

1 Where APER or COBS have been the subject of subsequent amendment they are stated as applicable during

the Relevant Period.

(1) Whether that conduct relates to activites that are subject to other

provisions of the Handbook;

(2) Whether that conduct is consistent with the requirements and standards

of the regulatory system relevant to his firm.

10.
Those descriptions and factors relevant to Statement of Principle 2 include:

APER 4.2.2G which states:

In the opinion of the Authority conduct of the type described in […] APER

4.2.5G, […] does not comply with Statement of Principle 2.

APER 4.2.5G which states:

Recommend an investment to a customer, or carrying out a

discretionary transaction for a customer, where the approved person

does not have reasonable grounds to believe that it is suitable for that

customer, falls within APER 4.2.2G.

Conduct of Business Sourcebook (“COBS”)

The client’s best interest rule

11.
COBS 2.1.1R:

(1) A firm must act honestly, fairly and professionally in accordance with

the best interests of its client (the client's best interests rule).

Communication is fair clear and not misleading

12.
COBS 4.2.1R:

(1) A firm must ensure that a communication or a financial promotion is

fair, clear and not misleading.

Assessing suitability: the obligations

13.
COBS 9.2.1R:

(1) A firm must take reasonable steps to ensure that a personal

recommendation, or a decision to trade, is suitable for its client; and

(2) When making the personal recommendation or managing his

investments, the firm must obtain the necessary information

regarding the client's:

(a) knowledge and experience in the investment field relevant to

the specific type of designated investment or service;

(b) financial situation; and

(c) investment objectives;

so as to enable the firm to make the recommendation, or take the

decision, which is suitable for him.

14.
COBS 9.2.2R:

(1) A firm must obtain from the client such information as is necessary

for the firm to understand the essential facts about him and have a

reasonable basis for believing, giving due consideration to the nature

and extent of the service provided, that the specific transaction to be

recommended, or entered into in the course of managing:

(a) meets his investment objectives;

(b) is such that he is able financially to bear any related investment

risks consistent with his investment objectives; and

(c) is such that he has the necessary experience and knowledge in

order to understand the risks involved in the transaction or in

the management of his portfolio.

(2) The information regarding the investment objectives of a client must

include, where relevant, information on the length of time for which

he wishes to hold the investment, his preferences regarding risk

taking, his risk profile, and the purposes of the investment.

(3) The information regarding the financial situation of a client must

include, where relevant, information on the source and extent of his

regular income, his assets, including liquid assets, investments and

real property, and his regular financial commitments.

15.
COBS 9.2.3 R:

The information regarding a client’s knowledge and experience in the

investment field includes, to the extent appropriate to the nature of the

client, the nature and extent of the service to be provided and the type

of product or transaction envisaged, including their complexity and the

risks involved, information on:

(1) the types of service, transaction and designated investment with

which the client is familiar;

(2) the nature, volume, frequency of the client’s transactions in

designated investments and the period over which they have

been carried out;

(3) the level of education, profession or relevant former profession

of the client.

16.
COBS 9.2.4 R:

A firm must not encourage a client not to provide information for the

purposes of its assessment of suitability.

17.
COBS 9.2.5 R:

A firm is entitled to rely on the information provided by its clients unless

it is aware that the information is manifestly out of date, inaccurate or

incomplete.

Insufficient information

18.
COBS 9.2.6R:

If a firm does not obtain the necessary information to assess suitability,

it must not make a personal recommendation to the client or take a

decision to trade for him.

Suitability reports

19.
During the Relevant Period COBS 9.4 set out the following rules and guidance

concerning Suitability reports.

20.
COBS 9.4.1 R:

A firm must provide a suitability report to a retail client if the firm makes

a personal recommendation to the client and the client:

(2) buys, sells, surrenders, converts or cancels rights under, or

suspends contributions to, a personal pension scheme or a

stakeholder pension scheme; or

(3) elects to make income withdrawals or purchase a short-term

annuity; or

(4) enters into a pension transfer or pension opt-out

21.
COBS 9.4.7R:

The suitability report must, at least:

(1) specify the client's demands and needs;

(2) explain why the firm has concluded that the recommended

transaction is suitable for the client having regard to the

information provided by the client; and

(3) explain any possible disadvantages of the transaction for the

client.

22.
COBS 9.4.8 G:

A firm should give the client such details as are appropriate according to

the complexity of the transaction.

Pension transfers, conversions, and opt-outs

23.
COBS 19.1 applies, with some exclusions, to a firm that gives advice or a

personal recommendation about a pension transfer, a pension conversion or a

pension opt-out. The following provisions of COBS 19.1 are set out as they

applied during the Relevant Period.

24.
COBS 19.1.2R:

A firm must:

(1) compare the benefits likely (on reasonable assumptions) to be

paid under a defined benefits pension scheme or other pension

scheme with safeguarded benefits with the benefits afforded by

a personal pension scheme, stakeholder pension scheme or

other pension scheme with flexible benefits, before it advises a

retail client to transfer out of a defined benefits pension

schemeor other pension scheme with safeguarded benefits;

(2) ensure that that comparison includes enough information for

the client to be able to make an informed decision;

(3) give the client a copy of the comparison, drawing the client's

attention to the factors that do and do not support the firm’s

advice, in good time, and in any case no later than when the

key features document is provided; and

(4) take reasonable steps to ensure that the client understands the

firm's comparison and its advice.

25.
COBS 19.1.3G:

In particular, the comparison should:

(1) take into account all of the retail client's relevant circumstances;

(2) have regard to the benefits and options available under the

ceding scheme and the effect of replacing them with the benefits

and options under the proposed scheme;

(3) explain the assumptions on which it is based and the rates of

return that would have to be achieved to replicate the benefits

being given up;

(4) be illustrated on rates of return which take into account the

likely expected returns of the assets in which the retail client's

funds will be invested; and

(5) where an immediate crystallisation of benefits is sought by the

retail client prior to the ceding scheme’s normal retirement age,

compare the benefits available from crystallisation at normal

retirement age under that scheme.

26.
COBS 19.1.6G:

When advising a retail client who is, or is eligible to be, a member of a

defined benefits occupational pension scheme or other scheme with

safeguarded benefits whether to transfer, convert or opt-out, a firm

should start by assuming that a transfer, conversion or opt-out will not

be suitable. A firm should only then consider a transfer, conversion or

opt-out to be suitable if it can clearly demonstrate, on contemporary

evidence, that the transfer, conversion or opt-out is in the client's best

interests.

27.
COBS 19.1.7G:

When a firm advises a retail client on a pension transfer, pension

conversion or pension opt-out, it should consider the client’s attitude to

risk including, where relevant, in relation to the rate of investment growth

that would have to be achieved to replicate the benefits being given up.

28.
COBS 19.1.7AG:

When giving a personal recommendation about a pension transfer or

pension conversion, a firm should clearly inform the retail client about

the loss of the safeguarded benefits and the consequent transfer of risk

from the defined benefits pension scheme or other scheme with

safeguarded benefits to the retail client, including:

(1) the extent to which benefits may fall short of replicating those

in the defined benefits pension scheme or other scheme with

safeguarded benefits;

(2) the uncertainty of the level of benefit that can be obtained from

the purchase of a future annuity and the prior investment risk

to which the retail client is exposed until an annuity is purchased

with the proceeds of the proposed personal pension scheme or

stakeholder pension scheme; and

(3) the potential lack of availability of annuity types (for instance,

annuity increases linked to different indices) to replicate the

benefits being given up in the defined benefits pension scheme.

29.
COBS 19.1.8G:

When a firm prepares a suitability report it should include:

(1) a summary of the advantages and disadvantages of its personal

recommendation;

(2) an analysis of the financial implications (if the recommendation is to

opt-out); and

(3) a summary of any other material information.

Fit and Proper test for Employees and Senior Personnel (“FIT”)

30.
Guidance on the question whether an individual is a fit and proper person is

given in the part of the Handbook called the Fit and Proper Test for Employees

and Senior Personnel (FIT). FIT 1.3.1G states that the Authority will have

regard to a number of factors when assessing the fitness and propriety of a

person to perform a particular controlled function. The most important

considerations will be the person’s:

(1) honesty, integrity and reputation;

(2) competence and capability; and

(3) financial soundness.

31.
For the purposes of this Notice the only relevant consideration is (2)

competence and capability.

Enforcement Guide (“EG”)

32.
The Authority’s policy for exercising its power to make a prohibition order is

set out in Chapter 9 of EG.

33.
EG 9.2.2 states that the Authority has the power to make a range of prohibition

orders depending on the circumstances of each case and the range of regulated

activities to which the individual’s lack of fitness and propriety is relevant.

Depending on the circumstances of each case, the Authority may seek to

prohibit an individual from performing any class of function in relation to any

class of regulated activity, or it may limit the prohibition order to specific

functions in relation to specific regulated activities. The Authority may also

make an order prohibiting an individual from being employed by a particular

firm, type of firm or any firm.

34.
EG 9.2.3 states that the scope of the prohibition order will depend on the range

of functions which the individual concerned performs in relation to regulated

activities, the reasons why he is not fit and proper and the severity of risk

which he poses to consumers or the market generally. At EG 9.3.5(4) the

Authority gives a serious lack of competence as an example of the type of

behaviour which has previously resulted in the Authority deciding to issue a

prohibition order.

35.
EG sets out the Authority’s approach to taking disciplinary action. The

Authority’s approach to financial penalties is set out in Chapter 7 of EG, which

can be accessed here:

Decision Procedures and Penalties Manual (“DEPP”)

36.
Chapter 6 of DEPP, which forms part of the Authority’s Handbook, sets out the

Authority’s policy for imposing a financial penalty. The Authority applies a five-

step framework to determine the appropriate level of financial penalty. DEPP

6.5B sets out the details of the five-step framework that applies to financial

penalties imposed on individuals in non-market abuse cases, which can be

accessed here: