FCA fined Pembrokeshire Mortgage Centre £2.35M for bad British Steel pension advice

The FCA fined Pembrokeshire Mortgage Centre Limited (PMC, trading as County Financial Consultants, in liquidation) £2,354,331 for unsuitable advice to consumers transferring out of the British Steel Pension Scheme (BSPS) and other defined benefit (DB) pension schemes. PMC advised 420 consumers — nearly two-thirds of them BSPS members — and advised 93% to transfer, earning over £2M in transfer and ongoing advice fees.

The FCA judged that 60% of PMC's advice was unsuitable, worse than the BSPS picture overall (46% of BSPS transfers unsuitable). Many customers were unusually vulnerable: BSPS's uncertain future and a short decision window pressured them to act, and some relied on the guaranteed income for retirement or dependents needing long-term care. Failings included generic, templated suitability reports with contradictory, misleading and confusing statements, and inadequate resources for the case surge.

The scale: approximately £123M of transferred funds were advised on, averaging about £293,000 per customer (£314,000 for BSPS members). As of 2022-11-30 the Financial Services Compensation Scheme had upheld 213 pension transfer claims against PMC and paid over £13.3M — with 80 claimants hitting the £85,000 maximum; without the cap, compensation would have reached roughly £14.6M. Enforcement executive Mark Steward called the quality of advice 'woeful' and 'particularly egregious' given BSPS members' vulnerability.

PMC is in liquidation, and the FCA said it would give preference to creditors — some of them consumers — ahead of its penalty to maximize redress funds. The FCA was still progressing about 30 ongoing investigations into firms and individuals over BSPS advice, some in litigation, and had just published final redress-scheme rules on 2022-11-28.

£2,354,331 fine in liquidation; FSCS paid over £13.3M on 213 upheld claims; roughly £123M of pension value transferred

Advisers earned over £2M in fees tied to transfers, aligning their pay against customers' guaranteed incomes

Generic templated reports were not tailored to individual circumstances and contained contradictory statements

The firm lacked resources for the BSPS-driven case surge, further degrading advice quality

Fee-driven pension transfer advice with templated reports converts a regulated service into a machine for harvesting guaranteed incomes

As of late 2022 PMC was in liquidation with the FCA penalty subordinated to creditor redress, FSCS was processing claims (88% uphold rate), and the FCA's roughly 30 related BSPS investigations continued, with a redress scheme's final rules published 2022-11-28.