The FCA has censured Quilter-owned Lighthouse Advisory Companies Restricted for critical recommendation failings in relation to the British Metal Pension Scheme (BSPS) which resulted in £23m paid in redress to shoppers.
Nevertheless, the FCA has determined to not impose a monetary penalty on Quilter/Lighthouse after the agency co-operated absolutely with the investigation and compensated shoppers.
The watchdog censured Lighthouse for unsuitable recommendation given between 1 April 2015 and 30 April 2019.
Lighthouse suggested individuals trying to switch out of outlined profit pension schemes, together with members of the BSPS.
Through the interval, Lighthouse suggested 1,567 clients, 262 of whom have been members of the BSPS.
Quilter Monetary Planning acquired Lighthouse in June 2019, after the unsuitable recommendation was given. Quilter has, nonetheless, taken accountability for the unsuitable recommendation offered earlier than its buy of Lighthouse and has proactively carried out a redress train, the FCA mentioned.
By 30 April this yr, Quilter had paid roughly £23.17m in redress. The cash put affected Lighthouse clients again within the monetary place they might have been in have been it not for Lighthouse’s unsuitable recommendation.
An extra £440,000 has been provided to affected clients, greater than the charges Lighthouse obtained for the unsuitable recommendation.
Lighthouse had two advisers partially primarily based on web site on the British Metal works in Scunthorpe. Lots of these individuals Lighthouse suggested have been counting on their BSPS pension as their most important supply of retirement revenue.
Many have been in a weak place attributable to uncertainty across the scheme, the FCA mentioned. Lighthouse’s advisers didn’t problem BSPS members’ causes for transferring or correctly take into account alternate options to satisfy their retirement goals.
In some instances, Lighthouse advisers failed to offer proof as to why a switch could be in members’ finest pursuits.
Because of the failures, 53% of recommendation offered to BSPS members from April 2015 to April 2019 was unsuitable – greater than the trade common unsuitable BSPS recommendation ranges (46%).
Related failings within the recommendation course of have been discovered for different, non-BSPS clients, with 28% of that recommendation discovered to be unsuitable.
Therese Chambers, government director of enforcement and market oversight, mentioned: “Many shoppers have been wrongly suggested by Lighthouse to switch out of their precious assured pensions. Given the weak place of shoppers transferring out the British Metal Pension Scheme, the agency ought to have taken actual care in offering recommendation – it failed to take action.”
She added that Quilter, “deserves full credit score for taking accountability for unsuitable recommendation given earlier than they purchased Lighthouse and for the proactive manner through which they’ve labored with the FCA to place it proper.”
Since Quilter acquired Lighthouse, it has changed Lighthouse’s senior administration crew and its inside processes for outlined profit switch recommendation.
Learn extra details about the British Metal pension redress scheme.
In an announcement at the moment, Quilter famous the FCA’s determination concludes its enforcement investigation into whether or not Lighthouse Advisory Companies Restricted (Lighthouse) breached FCA necessities in reference to advising on and arranging outlined profit pension transfers from 1 April 2015 to 30 April 2019. Quilter mentioned the pension switch recommendation that gave rise to the FCA’s determination was offered by Lighthouse previous to the acquisition of Lighthouse Group plc (Lighthouse’s mum or dad firm) by the corporate’s subsidiary, Quilter Monetary Planning Restricted, in June 2019.
Quilter’s chief government Steven Levin mentioned: “Though the related recommendation pre-dated our acquisition of Lighthouse, we’ve got fulfilled our dedication to making sure that Lighthouse has responded to this case in a manner that’s in line with our values. We’re happy that the FCA recognised our co-operation with its investigation and that we’ve got proactively and promptly paid redress to affected clients.”