The Upper Tribunal has found that a pension transfer specialist and her supervisor breached FCA principles by dishonestly backdating an authorised representative agreement and giving unsuitable pension transfer advice.

The case followed an appeal against an FCA decision notice from early 2024, which had banned the pair from working in financial services and proposed fines.

The FCA had argued that the advice was unsuitable because the pension transfer specialist did not account for how clients’ funds would be invested after transfer. However, because the regulatory action was brought more than six years later, the FCA could not rely on that argument before the tribunal.

Legal Director Ian D’Costa commented that the case highlights the different time limits that apply to regulatory action and consumer complaints. While the FCA faced difficulties because its action came more than six years after the advice, FOS allows complaints within three years of a consumer becoming aware of an issue – something that could be crucial in an area like pensions, where the damage can remain unnoticed for many years.

Ian noted that the mid-2010s were generally a time of “increasing concern about DB to DC transfers”, and that “pension transfers were definitely on the FCA’s radar”, with alerts issued in 2013 and 2014 and tighter rules introduced from 2018.

Ian added that “it’s very much a different world now from what it was at the time of the case”, advisers are much more cautious, COBS rules are more comprehensive, and the FCA is viewed as more proactive. Pension scams legislation “has been promoted extensively” by the Pensions Regulator, giving trustees the right to delay or stop suspicious transfers.

Ian’s comments were published in Mallowstreet.