Pembrokeshire Mortgage Centre (PMC) has been fined £2.4m by the FCA for delivering unsuitable advice to consumers to transfer out of the British Steel Pension Scheme (BSPS) and other defined benefit (DB) pension schemes.

The FCA stated that that most people should keep the guaranteed income provided by a DB pension.

However, PMC advised 420 consumers, of which around two-thirds were BSPS members, on whether to transfer out of their DB scheme, with 93% advised to transfer. PMC earned over £2m in transfer and ongoing advice fees.

Many of the people advised were in a vulnerable position due to the uncertainty surrounding the future of BSPS, and the short timescale they had to make a decision. According to the FCA’s investigation, these people did not receive the quality of advice they needed to make an informed decision. The regulator has estimated that PMC gave unsuitable advice in 60% of cases, even higher than BSPS as a whole.

PMC, which was trading as County Financial Consultants, is currently in liquidation. The FCA said it will give preference to creditors, some of whom may be consumers, ahead of its financial penalty, to maximise funds available for redress. 

Commenting on the case, FCA executive director of enforcement and market oversight, Mark Steward, said: “PMC advised hundreds of consumers to give up valuable defined benefit pensions without any adequate justification or rationale, using generic, templated advice not tailored to the specific circumstances of their customers while earning fees in doing so.

“The quality of advice seen here was woeful. The failings were particularly egregious in the context of the BSPS, where customers were in an unusually vulnerable position. The FCA’s investigation into the involvement of others in these matters remains ongoing.

“Any consumers who were advised to transfer should contact the Financial Services Compensation Scheme to see if they are owed redress.”

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