The UK’s financial regulator has issued a £1.3m fine to a pensions adviser it described as “seriously incompetent” for his work advising members of the British Steel Pension Scheme.
Geoffrey Armin, who worked for Retirement and Pension Planning Services Limited (RPPS), advised a 422 customers including 183 BSPS steelworkers.
In total, he advised on £125m worth of pensions transfers, £74m of which related to BSPS. The fine, the first of its kind issued by Financial Conduct Authority (FCA), will seek to recoup £1,284,523.
Armin will also be banned from advising consumers on pension transfers and pension opt outs, the FCA said.
Announcing the decision, the watchdog said: “In advising customers, Mr Armin failed to obtain the necessary information required to assess the suitability of a pension transfer for a customer, and also disregarded information including customers’ financial situation, income needs throughout retirement, and how their existing pension benefits compared to the proposed alternative.”
“In some cases, Mr Armin only informed customers of the consequences of their decision to forego the valuable guaranteed benefits offered by their defined benefit pension after they had already transferred out of the scheme.”
Armin is appealing against the decision in the FCA’s Upper Tribunal. He has said that the penalty will cause him serious financial hardship.
However, the FCA said that since he had been informed that he would be fined, he had paid out £108,000 to family members.
“The timing of these payments, and the absence of full and frank evidence being provided in relation to these payments, leads the Authority to conclude that the payments were made by Mr Armin with the intention of frustrating or limiting the impact of the action proposed by the Authority”, it said.
The BSPS case, which saw over 7,000 workers lose a combined £400m from bad pensions advice, is one of the greatest pension scandals in recent years.
When Tata Steel decided to sell off British Steel in 2016, some 100,000 workers were forced to choose what to do with their pensions.
Advisors were paid £3,500 per British Steel worker they transferred off the company’s pension account, with a further £6,000 for every year each worker stayed with the new investment.