Another adviser banned and fined £850,000 over pension transfers

The FCA has banned Paul Steel of Estate Matters Financial (EMF) from working in financial services over unsuitable pension transfer advice. He will also pay £850,000 to the Financial Services Compensation Scheme (FSCS).

Steel is the third adviser to be fined or banned over pension transfer failures in the past week.

The FCA found that Steel provided unsuitable advice to customers to transfer out of defined benefit pension schemes, including the British Steel Pension Scheme (BSPS). He also showed a lack of honesty and integrity in selling his client book for less than its value, to himself, meaning that customers who had lost out from the poor advice could not pursue EMF for redress.

Between 2015 and 2018, more than 480 clients were given defined benefit transfer advice by EMF and over £140m of pension assets were transferred as a result. Overwhelmingly (86%), this advice failed to meet the required standards as Steel failed to collect the right information and/or disclose the risks of transferring.

As a result of his conduct in selling his client book, the FCA sought and obtained a freezing injunction, and brought proceedings in the High Court seeking redress for customer losses. It agreed to settle those proceedings on the basis of Steel’s agreement not to contest the FCA’s penalties.

The FCA imposed a fine of £3,694,400, however, it agreed not to enforce this provided Steel pays £850,000 to the FSCS, which represents substantially all of his remaining assets. Without this settlement, the FCA said most or all of Steel’s assets would have been spent on the High Court proceedings rather than compensating consumers.

Therese Chambers, joint executive director of enforcement and market oversight, said: "Mr Steel failed to provide suitable pension transfer advice. But he also failed to act with honesty and integrity when he improperly sold the firm’s assets for less than their value - to himself - so that he could enjoy the profits of the business without the burden of the risks that he had created. We are determined that those who fail in their duties to their customers take responsibility for paying towards redress and do not expect the FSCS, and the vast majority of firms who do the right thing, to pick up the tab for their failings."