Consumer watchdogs have banned three financial advisers and stopped another from running a financial firm for their involvement in manipulating pension scheme funds that let them pocket £4 million in commission.
An investigation by the Financial Conduct Authority (FCA) found the advisers unnecessarily switched investments in six pension schemes to generate the cash.
As a result the retirement savers in the schemes could be paid lower pensions as investments in the schemes were considered high-risk.
The four all acted together in the conspiracy:
- Michael Conway, director of CBW Pensions Forensics Limited, overlooked telling the pension funds that he would gain from advice received by CBW Pensions Forensics from G&G Financial Services.
In April 2010, he influenced the financial advice given by Andrew Powell on behalf of G&G for personal gain and made a sham introducer agreement between G&G and a taxi company to disguise a payment of £56,000. £2.1 million of the total commission generated by the IFAs was paid to him.
- Andrew Powell was an independent advisor to CBW Pensions Forensics while employed by G&G. Despite raising concerns about the suitability of investments, he recommended that the affected pension schemes should invest £8 million in a high-risk property fund suggested by Michael Conway.
- Martin Gwynn owned G&G. Between March 2007 and September 2010 he failed to authorise Andrew Powell as a director, and did not monitor advice Powell offered to the affected pension schemes.
- Daniel Conway was a director of Staverton Wealth Management, which was partly owned by Michael Conway. Daniel Conway was appointed with no prior experience of advising occupational pension schemes and failed to offer independent or suitable advice
Tracey McDermott, FCA director of enforcement and financial crime said: “When it comes to pension funds, people expect their investments to be carefully managed given the potential impact on their retirement income. This makes the behaviour of this quartet particularly disgraceful. The FCA will not hesitate to act where we find inept or dishonest individuals.”
Warnings about bogus advisers
The FCA has also issued these warnings about bogus firms posing as regulated financial advisers:
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser
Find out how to report unauthorised advisers on the FCA web site
