UK Upper Tribunal Upholds FCA Industry Ban on Pension Advisers, Reduces Financial Penalties

The UK Upper Tribunal has upheld a ban imposed by the Financial Conduct Authority (FCA) against Richard Fenech and Heather Dunne, barring both individuals from working within the financial services industry. The tribunal affirmed that both parties acted dishonestly by submitting a backdated appointed representative agreement to the UK financial regulator.

According to the ruling, Heather Dunne traded as an independent financial adviser under Heather Dunne Independent Financial Adviser (HDIFA), acting as an appointed representative of Financial Solutions Midhurst Ltd (FSML), an entity owned and operated by Richard Fenech. The tribunal found that Dunne falsely asserted she had delivered pension scheme advice prior to actually doing so and failed to exercise proper care during the pension transfer advice process. Meanwhile, Fenech failed to provide appropriate oversight of her activities.

Between April 2015 and June 2017, Dunne advised approximately 92% of her clients to transfer out of defined benefit pension schemes. This activity resulted in more than £126 million being transferred, including instances where moving funds was not in the clients' best interests.

While upholding the industry prohibition, the Upper Tribunal modified the financial penalties initially proposed by the FCA. The regulator had calculated fines on the premise that all of Dunne's advice violated regulatory standards. However, the tribunal determined that penalties should reflect its finding that 18% of Dunne's clients received unsuitable advice. Additionally, it decided that only the income Fenech generated directly from his professional relationship with Dunne should count toward his fine. Consequently, the tribunal reduced the fines to £41,230 for Dunne and £16,046 for Fenech.

Therese Chambers, the FCA's executive director of enforcement and market oversight, welcomed the tribunal's ruling, stating that dishonesty and negligence have no place in the industry and emphasizing that regulated individuals must remain trustworthy even during high-pressure periods. Both individuals have 14 days from the date of the Upper Tribunal's decision to lodge an appeal.