FCA fines two directors £1.3m pension transfer advice failings

The FCA has fined two directors a total of £1.3m for their roles in operating a flawed pension advice process.

Toni Fox has received a fine of £681,536 and David Price has been fined £632,594. The two former directors of CFP Management from carrying out any regulated activity.

The FCA's investigation found that between April 2015 and October 2017, CFP, through its appointed representative, gave advice on 1,470 transfers worth more than £392m. Fox designed the pension transfer model and signed off on almost all of the advice. As directors of CFP, Fox and Price had oversight of the operation of the pension transfer model. Over 99% of the advice was to transfer and over 90% did not comply with FCA rules. Of those advised, 33 clients were members of the British Steel Pension Scheme.

Despite both having 30 years’ experience in the pensions industry, the FCA says Fox and Price provided advice without proper consideration of clients’ financial circumstances and objectives, attitude to risk and capacity for loss. The flawed business model they designed and operated gave rise to a significant risk that many clients transferred out of their defined benefit pension when it was not suitable for them to do so.

CFP received a fee of between £1,500 and £20,000 from each client they advised to transfer and charged £500 when they recommended against transfer. Both Fox and Price made substantial gains from this business - Ms Fox received £473,289 by way of salary, dividends and pension contributions from CFP and Mr Price made £439,302.

Both have referred the decision notices to the Upper Tribunal where they will present their case, and any findings in the decision notices are therefore provisional.

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: "Ms Fox and Mr Price’s misconduct meant that customers did not receive the advice they needed when trying to secure comfort and peace of mind for their retirement.

"Despite having a wealth of experience in the industry, they both oversaw and designed a deeply flawed advice model that was little more than a machine to churn out recommendations to transfer, placing people’s hard earned retirement money at risk."