LJ Financial Planning fined by FCA for unsuitable pension transfer advice
An FCA regulated firm from Warrington have been fined £107,200 by the Financial Conduct Authority for giving unsuitable pension advice to 114 customers between March 2010 and December 2012.
LJ Financial Planning advised their clients to transfer their existing personal or occupational pensions into a SIPP. A SIPP (self-invested personal pension) comes with a lot more risks than with other pension types as the individual is responsible for managing their own investments which, if not monitored carefully by a financially sophisticated person, can result in huge losses.
LJFP offered no support or advice to their clients regarding these investments that were often very high risk for the customers. In a final notice, the FCA says that LJFP was aware that these investments were potentially high-risk, and yet were not prepared to advise customers on the underlying investments.
Between January 2013 – November 2017, LJFP were also caught advising their customers to invest in companies which they were shareholders in. They did not disclose this information to their customers beforehand which resulted in a £2,668,819.41 pay out to the 41 customers who were affected.
FCA executive director of enforcement and market oversight Mark Steward says: “Investors should be able to trust their financial advisers with the pension contributions they’ve built up over a lifetime of hard work. These failings were especially serious because LJFP facilitated the transfer of these investors’ pensions into high-risk investments without assessing whether the investments were suitable for investors.
“In many instances, these investments are now worthless and many investors are approaching or already in retirement and so especially vulnerable to the risk of significant losses. Redress is important but these investors should never have been placed in this position in the first place. Investors should also be able to rely on their financial advisers to manage conflicts fairly and to disclose them so investors are able to make better informed decisions.”
If you have seen your pension drastically decrease in value following advice from an independent financial advisor / regulated firm, please get in touch so that we can evaluate your situation and offer our free expert advice.