Omar Hussein, former director and senior financial adviser at pension switching firm Consumer Wealth Ltd (CWL), has been prohibited from working in financial services and fined £116,000, the Financial Conduct Authority (FCA) has revealed.
The FCA found Hussein advised customers to switch their existing pensions when this was often unnecessary and not in their best interest.
Between 2015 and 2017, Hussein and his firm advised 620 customers to switch their pensions into self-invested personal pensions (SIPPs) containing significant investments in ‘Portfolio 6' (P6), a high-risk investment offered by discretionary fund management firm Greyfriars Asset Management LLP.
His misconduct put at risk an estimated £13.5m of CWL customers' retirement savings, the FCA said. CWL has ceased trading and is now in liquidation. The Financial Services Compensation Scheme (FSCS) is investigating claims made by CWL's customers and has paid compensation to 437 of CWL's customers to date. Consumers that are concerned they may be affected should contact the FSCS, the FCA said.
The regulator said P6 was a high-risk investment comprised of unregulated mini-bonds relating to overseas investments in car parks, renewable energy and holiday resorts.
"These investments were illiquid in nature and highly likely to be unsuitable for the low net worth, financially inexperienced investors who were the firm's target market", the regulator said.
Hussein disregarded clear statements and risk warnings about P6 contained in Greyfriars promotional material, claimed that customers investing in P6 were "experienced investors" when there was no reasonable basis for doing so, according to the FCA, which also said he "charged fees to customers for an on-going advice service, which the firm did not provide".
FCA executive director for enforcement and market oversight Mark Steward said: "Consumers work hard over many years to save for their retirement and unsuitable pensions advice can significantly impact their quality of life in retirement - or their ability to retire at all. Mr Hussein acted recklessly and abused the trust of his clients by taking unjustifiable risks with their retirement savings. He has proven himself unfit to work in the financial services industry."
The regulator revealed Omar Hussein agreed to settle at an early stage of the investigation and therefore qualified for a 30% discount. Without the discount, the fine would have been £165,797.38.
