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November 27, 2023

FCA bans two individuals for ‘incompetent’ British Steel Pension advice

The Financial Conduct Authority has banned two individuals it says performed a “double act of carelessness and incompetence” that put people’s pensions at risk.

The FCA banned Nigel Lewis and Susan Jones of West Wales Financial Services Limited from advising customers on pension transfers and pension opt outs.

Mr Lewis has also been banned from holding any senior management functions in a regulated firm.

The FCA said that Mr Lewis and Ms Jones will also pay £26,800 and £40,888, respectively, to the Financial Services Compensation Scheme (FSCS). This is to contribute towards the compensation owed to customers of West Wales Financial Services Limited.

Why has FCA banned Lewis and Jones of West Wales Financial Services?

The FCA says that between March and December 2017, West Wales Financial Services Ltd provided unsuitable pension transfer advice. It added that the advice was ‘based on the incorrect assumption’ that it would be in their customers’ best interests to transfer out of their secure defined benefit pension.

According to the Regulator Ms Jones advised 27 of 28 customers to transfer out of their DB pension scheme and 25 were members of the British Steel Pension Scheme (BSPS).

More than £9.7m of pension funds were transferred to riskier defined contribution schemes.

Mr Lewis had an oversight role which meant he was responsible for ensuring that the advice given by the firm was suitable and to take reasonable steps to ensure that it was. Something the FCA says he had failed to do.

Therese Chambers, Joint Executive Director of Enforcement & Market Oversight said: “Mr Lewis and Ms Jones performed a double act of carelessness and incompetence that put people’s hard-earned pensions at risk.  They would have continued to provide bad advice to many more had it not been for the FCA’s timely intervention. People need someone they can trust to give them informed advice on their financial future – and it’s not these two.”

FCA Intervention

The FCA intervention in December 2017 stopped West Wales Financial Services Ltd from processing a further 141 transfers for customers, all of whom were members of the BSPS. According to the FCA not only would ‘the risk of loss’ have continued but these customers may have transferred out funds in excess of £43m.

Both Mr Lewis and Ms Jones have agreed to settle their cases and to make payments to the FSCS to contribute towards the compensation.

The FSCS has to date (November 2023) paid out £758,725.55 in compensation to customers of West Wales Financial Services Ltd.

However, the FCA said had it not been for the FSCS compensation limit of £85k the total compensation available to customers would have been £972,197.

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.