Belfast accountant David Watters has been fined £75,000 by the Financial Conduct Authority (FCA) for failing to exercise due skill, care and diligence in his role as compliance oversight officer, firstly at FGS McClure Watters (FGS) and then Lanyon Astor Buller Ltd (LAB)
Following an investigation, the FCA found that Watters failed to take reasonable steps to ensure that the process in place at FGS and LAB, for giving advice on enhanced transfer value (ETV) pension transfer exercises, was adequate and met regulatory standards.
The regulator said this led to a serious risk of unsuitable advice being given to customers of FGS and LAB about the merits of transferring their pension, from a defined benefit (DB) to a defined contribution (DC) scheme, as part of an ETV pension transfer exercise.
Approximately 500 customers that received advice from FGS or LAB transferred their pensions from a DB scheme to a DC scheme, with a combined value of approximately £12.7m. In many cases, it may have been unnecessary for customers to leave their DB schemes, thereby losing their guaranteed benefits, the FCA found.
The FCA said Watters failed to give sufficient consideration to whether the advice process was compliant; he did not take reasonable steps to gain a sufficient understanding of the relevant regulatory requirements; and did not obtain an appropriate third party review of the processes to ensure compliance.
Watters also failed to take reasonable steps to ensure that advisers were properly monitored to reduce the risk of unsuitable ETV pension transfer advice being given to customers.
Mark Steward, the FCA executive director of enforcement and market oversight said: ‘It was Mr Watters’ responsibility to take reasonable steps to put in place a compliant advice process. His failure to do this placed customers at risk of needlessly losing valuable benefits for their retirement.’
LAB has agreed to contact affected customers and where loss has been caused, it will pay appropriate redress.
The FCA final notice for David Watters is here.