The Financial Conduct Authority (FCA) has handed out fines and moved to ban two advisers for their roles in operating a flawed pension advice process.

Toni Fox and David Price, two former directors of CFP Management, have been fined £682,000 and £633,000 respectively, and have both been banned by the regulator from carrying out any regulated activity.

An investigation by the FCA found that the pair risked people receiving unsuitable advice to transfer out of defined benefit pension schemes.

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, and as directors of the firm, both Fox and Price had oversight of the operation of the pension transfer model.

According to the regulator, over 99% of the advice was to transfer despite over 90% not complying with FCA rules. Of those advised, 33 clients were members of the British Steel Pension Scheme.

Despite both advisers having 30 years’ experience in the pensions industry, the FCA suggested that the pair had provided advice without proper consideration of clients’ financial circumstances and objectives, attitude to risk and capacity for loss. The business model they 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, the FCA said.

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, with Fox receiving £473,000 by way of salary, dividends and pension contributions from CFP, and Price receiving £439,000.

Joint executive director of enforcement and market oversight at the FCA, Therese Chambers, 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.”

Fox and Price have referred the decision notices to the Upper Tribunal where they will present their case, which will determine the appropriate action for the FCA to take.

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