The UK regulator has punished four men for 'disgraceful' actions that generated more than £4 million (€4.7 million) in commissions by advising pension schemes to needlessly move around investments.
Members' interests may have been jeopardised, says the Financial Conduct Authority (FCA), because some of the scheme's assets were put in unsuitably high-risk investments.
The scandal concerns pension trustees CBW Trustees and CBW Pensions Forensics (collectively CBW), which were working for six occupational pension schemes.
Michael Conway, a director of CBW, actively influenced the advice CBW received from G&G Financial Services, an independent financial adviser (IFA), for personal gain, found the investigation, pocketing £2.1 million of the commissions.
Andrew Powell, an employee of G&G Financial Services, allowed Michael Conway to influence his advice for personal benefit, at one time recommending the pension schemes invest £8 million in a high-risk, illiquid property portfolio chosen by Michael Conway.
The FCA investigation concluded that both men “lacked integrity” and banned them from working in the financial services industry.
Martin Gwynn, the owner of G&G, was also banned from the industry for failing to properly monitor the advice Powell gave to pension schemes or investigate payments to Michael Conway and other parties.
Daniel Conway, director of another IFA, Staverton Wealth Management, which was partially owned by Michael Conway, was criticised for failing to understand the requirements of his role or offer suitable advice. He has been stopped from performing any roles designated as “key functions” at a financial services firm by the FCA.
Gwynn and Daniel Conway were described as “incompetent, and incapable of properly discharging their duties”, by the investigation.
“When it comes to pension funds, people expect their investments to be carefully managed given the potential impact on their retirement income,” says Tracey McDermott, FCA director of enforcement and financial crime. “This makes the behaviour of this quartet particularly disgraceful.”
CBW Trustees and CBW Pensions Forensics have no connection to CBW Financial Planning or London accountancy firm CBW (Carter Backer Winter).
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