A financial advice firm which has allegedly broken promises not to help clients with pension transfers has been ordered to cease trading.
The Financial Conduct Authority has told Bank House Investment Management, based in Cheltenham, Gloucestershire, to freeze all assets and to hand over any records of regulated activities.
In September 2015, the firm pledged to stop pension transfers after a probe by the FCA.
The FCA alleges that around a year later, the agreement was broken when a SIPP provider disclosed that 78 pension transfers involving £2.65 million were made in the year ending October 2016 by customers advised by Bank House.
The FCA says the advice firm failed to declare all the transfer to SIPPs and recommended five other customers to transfer to two other AIPP providers in the same period.
Watchdog claims SIPP transfer breach agreement
“When questioned about the pension switches done to the account offered by the SiPP provider, the firm said it understood that the account was not a SiPP, but a personal pension with a deferred SiPP option,” said the FCA.
“The FCA has confirmed with the SiPP provider that it does not offer the option of a deferred SiPP in any of its accounts and that all 78 switches on which the firm advised were to a SiPP account.
“The firm also said that it understood that the FCA had agreed it could conduct pension switches where customers would be investing in a platform.
“This does not reflect the wording of the voluntary requirement and is not consistent with the authority’s correspondence with the firm about the voluntary requirement in which the authority repeatedly stated that the firm was not permitted to do any pension switches involving SiPPS.”
Customer data sold
The FCA also revealed Bank House sold customer data to another firm.
Payments totalling £163,000 were made to Bank House, although the advice firm claimed the amount was no more than £70,000.
“Bank House said that these monies relate to the sale of the customer data. Some of the monies were used to pay for the salary costs of staff employed by Bank House who were previously employed by another unauthorised firm, which was also involved in the pension switching business that gave rise our initial concerns,” said the FCA.
“It is unclear if there was in fact an arrangement for the third-party firm to cover the costs of those staff.”