A former advice firm chief executive is fighting a lifetime ban and a £230,000 fine from City watchdogs for his part in recommending unregulated investments to hundreds of pension savers.
Alastair Burns is appealing the penalty imposed by the Financial Conduct Authority (FCA).
His firm, TailorMade Investments (TMI), advised retirement savers on transferring pension funds into unregulated investments such as green oil, biofuels, farmland and overseas property via SIPP pensions.
Between January 2010 and January 2013, 1,661 pension savers invested £112,420,985 in the schemes.
Many have lost their retirement money.
The FCA explained Burns failed to ensure that TMI offered suitable advice to clients and did not disclose his personal conflicts of interest and the conflicts of interest relating to other individuals at TMI.
£40m compensation paid
“The personal recommendations process used to advise customers, for which Burns was jointly responsible, was inadequate,” said the FCA.
“The process failed to consider a customer’s individual circumstances, demands and needs, and instead resulted in personal recommendations being made predominantly based on the customer’s objective of using their existing pension funds to purchase alternative investments.”
The Financial Services Compensation Scheme (FSCS) has upheld 919 claims of unsuitable advice against TMI and paid compensation of more £40 million to investors.
More than half lost money investing in Harlequin Hotels and Resorts, a firm specialising in overseas property which went into liquidation. The company is also under investigation by the Serious Fraud Office.
Other investments included Sustainable AgroEnergy and Green Oil Plantations.
In 2015, Robert Shaw, former director of advisory firm TailorMade Independent Ltd (TMI), was banned from holding senior roles in financial services and fined £165,900 by the FCA.
The FCA argued that Shaw benefitted financially from being the director and shareholder of TailorMade Alternative Investments (TMAI), an unregulated introducer, which referred clients to TMI. Burns was also involved with this company.
Georgina Philippou, acting director of enforcement and market oversight at the FCA, said: “Shaw exposed customers to risky investments without considering if these products would meet their needs. In addition, he personally benefitted from sales of these products without revealing to customers the full extent of the benefits he received. His actions mean that many customers faced losing all of their hard-earned pension funds.”