The FCA discovered that Mr. Armin, who operated Retirement and Pension Planning Services Limited (dissolved), demonstrated serious incompetence in advising on defined benefit (DB) pension transfers. According to the findings, Mr. Armin provided advice on DB pension transfers to 422 customers, including 183 individuals associated with the British Steel Pension Scheme. Astonishingly, 174 of these individuals followed his advice and transferred out of the scheme. Consequently, the fees generated from these transfers amounted to £2.2m, of which Retirement and Pension Planning Services and Mr. Armin retained approximately £1.2m, or 55%.
Worryingly, during his interactions with clients, Mr. Armin consistently failed to gather the necessary information required for evaluating the suitability of a pension transfer, resulting in unsuitable advice. These actions contravene FCA guidance, which emphasizes assuming that such transfers are not in the best interests of customers. Additionally, in some instances, Mr. Armin informed clients of the implications of relinquishing the valuable guaranteed benefits offered by their DB pension only after they had already completed the transfer.
Speaking about the matter, Therese Chambers, joint Executive Director of Enforcement and Market Oversight at the FCA, expressed her concerns: “Mr. Armin provided misguided advice while profiting handsomely from it. Individuals entrust advisors with their financial security for their later years.”
Chambers further added: “Mr. Armin not only jeopardized the pensions individuals had diligently worked for but also eroded the trust between advisors and their clients. Such reckless incompetence has no place within the financial services industry.”
Initially, Mr. Armin contested the FCA’s decision to take legal action and referred the matter to the Upper Tribunal. The hearing was scheduled to commence on 11 September 2023. However, on 6 September 2023, Mr. Armin opted to pay a significant proportion of his assets to the Financial Services Compensation Scheme (FSCS) as compensation and subsequently withdrew his referral.
Had this settlement not been reached, the costs associated with the Upper Tribunal proceedings would have depleted Mr. Armin’s assets entirely, leaving no resources for redress or financial penalties. Furthermore, as part of the settlement, Mr. Armin will pay £200,000 to the FSCS in order to contribute to compensation owed to his clients, including members of the British Steel Pension Scheme. As of now, the FSCS has paid out a total of £3,961,517 in compensation to Mr. Armin’s affected customers.