Three men have been banned from working in the financial services industry by the Financial Conduct Authority (FCA); and another has been banned from holding key positions. This follows a review of CBW Trustees Limited and CBW Pensions Forensics Limited by the Pension Regulator (TPR) which found serious flaws in their conduct.
The men were associated with two independent financial advisors (IFAs) and were appointed to advise six occupational pension schemes. The FCA found that this advice led to the affected schemes unnecessarily moving around their investments, generating over £4 million in commission. The members of the affected pension schemes could also face lower retirement incomes, as pension scheme assets were placed in potentially unsuitable high-risk investments.
Tracey McDermott, FCA director of enforcement and financial crime said:
"When it comes to pension funds, people expect their investments to be carefully managed given the potential impact on their retirement income. This makes the behaviour of this quartet particularly disgraceful. The FCA will not hesitate to act where we find inept or dishonest individuals."
The FCA stepped in to investigate the behaviour of individuals approved to offer financial services. The investigation concluded that Michael Conway and Andrew Powell lacked integrity; whilst Martin Gwynn and Daniel Conway were incompetent, and incapable of properly discharging their duties.
- Michael Conway was a director of CBW Pensions Forensics Limited, but failed to disclose that he stood to gain financially from advice offered to CBW Pensions Forensics Limited by an IFA - G&G Financial Services Limited (G&G). In April 2010 he actively influenced the financial advice given by Andrew Powell on behalf of G&G for personal gain, and on one occasion facilitated a sham introducer agreement between G&G and a taxi company to disguise a payment of £56,000. £2.1 million of the total commission generated by the IFAs was paid to Michael Conway.
- Andrew Powell acted as independent advisor to CBW Pensions Forensics Limited whilst employed by G&G. Despite raising concerns about the suitability of the investment, he recommended that the affected pension schemes should invest £8 million in a high-risk and illiquid property fund chosen by Michael Conway. Powell personally benefitted by allowing CBW Pensions Forensics Limited to influence his advice between March 2010 and April 2010.
- Martin Gwynn owned G&G and all its shares. Between March 2007 and September 2010 he failed to seek the necessary authorisation from the FCA’s predecessor, the Financial Services Authority, when appointing Andrew Powell as a director, and didn’t properly monitor the advice Powell offered to the affected pension schemes. Gwynn also failed to take reasonable steps to investigate payments to Michael Conway and other third parties.
- Daniel Conway was a director of Staverton Wealth Management Limited (Staverton), which was partially owned by Michael Conway. Daniel Conway was appointed with no prior experience of advising occupational pension schemes. Between January 2007 and April 2010, the FCA found he failed to take steps to understand the requirements of his role, or offer independent or suitable advice.
To safeguard consumers’ interests, Michael Conway, Andrew Powell and Martin Gwynn received industry bans; and Daniel Conway has been stopped from performing any roles designated as ‘controlled functions’ by the FCA.
This reflects the FCA’s objective of securing appropriate protection for consumers, and its intention to hold approved people to account if they fail to meet the expected standards of integrity and professionalism.
The FCA has worked closely with The Pension Regulator to take action against the responsible individuals and track down assets located outside the UK. The new trustee appointed by TPR has recovered a significant proportion of the relevant funds on behalf of the affected pension schemes.
Notes for editors
- The Pension Regulator’s (TPR) Final Notice.
- CBW Trustees Limited and CBW Pensions Forensics Limited (collectively CBW) are not related to CBW Financial Planning Ltd, who are regulated by the FCA.
- Daniel Conway is banned from holding FCA controlled functions in future.
- CBW Trustees Limited and CBW Pensions Forensics Limited were not authorised by the FCA to carry out regulated activities, and appointed G&G and Staverton to offer investment advice. Staverton’s permissions were cancelled on 9 May 2012; G&G’s permissions were cancelled on 20 September 2012. Staverton and G&G are no longer trading.
- The trustee appointed by TPR is Pitmans Trustees Limited (“Pitmans”).
- On the 1 April 2013 the FCA became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA.