The Financial Conduct Authority has published a Decision Notice in respect of Alistair Burns, Chief Executive at TailorMade Independent Limited (TMI).
Mr Burns has referred this Decision Notice to the Upper Tribunal (the Tribunal) where he and the FCA will each present their case.
The Decision Notice, which reflects the FCA’s view of what occurred and how the behaviour is to be characterised, sets out that the FCA has decided to fine Mr Burns £233,600 and to prohibit him from performing any senior management or significant influence function in relation to regulated activity in financial services.
In the FCA’s view, Mr Burns failed to ensure that TMI provided suitable advice to its clients and failed to ensure that TMI managed fairly and clearly disclosed his own personal conflicts of interest and the conflicts of interest relating to other individuals at TMI.
Between January 2010 and January 2013, TMI provided advice to customers who were considering transferring or switching their existing pension funds via self-invested personal pensions (SIPPs) into unregulated investments such as green oil, biofuels, farmland and overseas property (Alternative Investments). During this period, 1,661 customers invested £112,420,985 in Alternative Investments, many of which were not typically permitted by their existing pension schemes.
As a director Mr Burns was required to take reasonable steps to ensure TMI complied with regulatory standards. In the FCA’s view he did not do so. The Authority has decided that he is not fit and proper to perform senior management or significant influence functions in relation to regulated activity in financial services. This is on the basis of his lack of competence to perform such functions. The FCA has not found that Mr Burns deliberately or recklessly failed in his duties.
As of September 2016 the Financial Services Compensation Scheme (FSCS) has upheld 919 claims of unsuitable advice against TMI, with compensation of over £40 million paid to date. More than half of the affected customers invested in a firm specialising in overseas property which subsequently went into liquidation with the result that the entirety of those investments was lost.