The UK’s financial watchdog has blacklisted five pensions advisors and fined them more than £1m after their advice saw customers lose a combined sum of more than £50m.
The UK’s Financial Conduct Authority (FCA) banned and fined the five men after they convinced more than 2,000 customers to put their pensions in high-risk funds, which later lost them a combined sum of £50m.
The losses came after customers were referred to the advisors by London based firm Hennessy Jones, which had a “significant financial interest” in the high-risk financial products being recommended.
Hennessy Jones had also played a role in designing the pensions advice process used by the pensions advice firms, as it referred customers to the pensions advisors.
The advisors then told customers to invest in high-risk financial products through their self-invested personal pensions (SIPPs) schemes, which allow pension holders to choose where their money is invested.
FCA exec Mark Steward said: “No reputable financial adviser should recommend that people put their entire pension savings in high-risk investments.”
“Customers were misled into believing that they would get independent and impartial advice, but their interests were reprehensively betrayed in this case.”
“This case also places firms’ relationships with unauthorised introducers in the spotlight.”