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Warning Notice Statement 23/4






1.1
The Financial Conduct Authority (the FCA) gave the following individual a warning

notice on 10 February 2023 proposing to take action in respect of the conduct

summarised in this statement. The notice concerns the conduct of an individual

(Individual A) who worked as a financial adviser whilst an approved person at a

small financial advice firm (Firm A).

IMPORTANT: A warning notice is not the final decision of the FCA. The
individual has the right to make representations to the Regulatory Decisions
Committee (RDC) which, in the light of those representations, will decide on
the appropriate action and whether to issue a decision notice. The RDC is a
Committee of the FCA board which decides whether the FCA should give certain
statutory notices described as within its scope by the FCA’s Handbook.

If a decision notice is issued, the individual has the right to refer the matter to
the Upper Tribunal which would reach an independent decision on the
appropriate action for the FCA to take, if any.

If either the RDC or the Upper Tribunal decides that no further action should
be taken, the FCA will publish a notice of discontinuance provided it has the
individual’s consent.

1.2
The following is a summary of the reasons why the FCA gave Individual A a warning


The FCA considers that Individual A breached Principle 2 of the FCA’s

Statements of Principle for Approved Persons when carrying out their controlled

function (CF30) whilst working at Firm A.


The conduct took place between 16 March 2017 and 14 December 2017 (the

Relevant Period). Individual A provided defined benefit transfer advice to

customers of the Firm, including members of the British Steel Pension Scheme.

The FCA consider that the individual’s approach to the advice given to defined

benefit transfer customers was not compliant with the rules and principles

governing this area of advice.

1.3
In particular, the FCA considers that, during the Relevant Period:

•
Individual A based their recommendation on the flawed assumption that a

transfer to meet a customer’s stated objectives was in the customer’s best

interests when these objectives were not viable or could have been achieved

by means other than transfer of their pension with valuable guarantees.

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•
Individual A did not properly consider customers’ financial situation, and

therefore the degree of reliance on the fund and whether they could bear the

risk, when assessing whether it was suitable for them to transfer out of their

Defined Benefit Pension Scheme.

•
Individual A 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.

•
Individual A did not undertake adequate transfer analysis, comparing the

benefits of the ceding and proposed schemes. Analysis contained errors which

gave a misleading picture as to how the schemes compared which meant the

customer was not presented with accurate information. Where comparisons

were accurate, the level of growth required did not match with the customer’s

the attitude to risk.

•
Individual A issued documentation to clients which did not contain adequate

information about the possible, personalised, disadvantages of transferring out

of their Defined Benefit Pension Scheme. Warnings that were given were would

have appeared as contradictory and therefore confusing to customers.

1.4
The FCA considers that the failings meant that the advice provided did not comply

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

the advice that a customer should transfer out of their Defined Benefit Pension

Scheme would not be suitable for them.