The UK’s Financial Conduct Authority has banned and fined former adviser Daniel Thomas 742,700 pounds for recklessly steering 53 clients through 63 defined benefit pension transfers without the qualifications or regulatory permissions the advice required.

What Happened

Thomas, a director and adviser at DPT Financial Solutions, operated as an appointed representative under principal firm Quilter Financial Services. Over five years he earned more than 173,000 pounds in fees advising clients, some of them members of the British Steel Pension Scheme, to transfer out of defined benefit schemes. The FCA found he misled both clients and pension providers about his professional qualifications, destroyed client records and did not cooperate with the regulator’s investigation. Thomas has referred the FCA’s decision to the Upper Tribunal, and the regulator will take no enforcement action until the tribunal rules.

Why It Matters

Defined benefit transfer advice remains one of the FCA’s most closely watched product lines, because the downside for a misadvised client, an irreversible loss of a guaranteed income, is severe and nearly impossible to unwind. The case adds to a run of FCA enforcement actions this year against advisers and firms operating outside their permitted scope (FCA Bans Ex-CEO Over Fake $200M Bond Portfolio Bid), a pattern the regulator itself has struggled to get ahead of (The FCA’s Bans Keep Coming After the Money Is Gone).

The Original Insight

The detail that should worry principal firms more than the ban itself is the appointed representative structure underneath it. Quilter authorized Thomas to operate under its permissions, and the FCA’s long-running scrutiny of that model means principal firms, not just the individuals they sponsor, increasingly carry the reputational and supervisory fallout when an appointed representative goes rogue. “When you advise someone on their pension, you hold their future in your hands. Mr Thomas recklessly betrayed that responsibility,” said Therese Chambers, the FCA’s Executive Director of Enforcement and Market Oversight.

Source: Financial Conduct Authority