The Upper Tribunal has upheld the Financial Conduct Authority’s decision to ban Richard Fenech and Heather Dunne from working in financial services over dishonesty and failings connected with defined-benefit pension transfer advice.
The tribunal agreed that the pair acted dishonestly when they provided the regulator with a backdated appointed-representative agreement. It also found that Dunne had falsely claimed she had given advice to some pension schemes before doing so.
Dunne traded as Heather Dunne Independent Financial Adviser and acted as a pension transfer specialist. Her business was an appointed representative of Financial Solutions Midhurst, which was owned and managed by Fenech.
Between April 2015 and June 2017, Dunne advised approximately 92% of her clients to transfer out of defined-benefit pension schemes. The recommendations resulted in more than £126m being transferred.
The tribunal concluded that 18% of the customers considered had received unsuitable advice. It also found that Dunne failed to take proper care when advising clients, while Fenech did not provide adequate oversight of her work.
FCA enforcement director Therese Chambers said: “Dishonesty and negligence have no place in our industry.”
The bans were upheld, but the tribunal reduced the associated financial penalties. Dunne’s fine was set at £41,230 and Fenech’s at £16,046.
The FCA had previously calculated the penalties on the basis that all Dunne’s advice breached regulatory requirements. The tribunal decided the fines should instead reflect its finding that 18% of clients received unsuitable advice.
It also ruled that only the income Fenech earned from his relationship with Dunne should be included when calculating his penalty. The judgment separated the seriousness of the conduct from the regulator’s original methodology for determining financial sanctions.
Defined-benefit pension transfers carry significant consequences because customers exchange a promised retirement income for assets exposed to investment performance, charges, withdrawal decisions, and longevity risk.
Advisers must assess a client’s circumstances, objectives, financial needs, attitude to risk, capacity for loss, and proposed destination investment. Where separate advisers are involved in the transfer and subsequent investment, responsibilities must be clearly defined and the overall suitability of the arrangement still considered.
The FCA said Dunne operated a deficient two-adviser model in which she provided pension transfer advice while another adviser handled the onward investment. The regulator’s earlier decision found that this structure created gaps in oversight and exposed customers to the risk of transferring into unsuitable investments.
The case also carries consequences for companies using appointed representatives. A principal business remains responsible for ensuring that representatives comply with regulatory requirements in activities for which it has accepted responsibility.
That obligation requires more than contractual documentation. Principals need effective due diligence, supervision, file reviews, management information, escalation processes, and evidence that concerns are corrected rather than allowed to persist.
The dishonesty finding adds a further governance dimension. Regulators rely on information supplied by authorised businesses and individuals when assessing compliance. Backdated or misleading documents undermine that process regardless of whether the underlying customer harm can be quantified precisely.
The reduced fines demonstrate that regulatory penalties remain open to scrutiny where the evidential basis or calculation is challenged successfully. The continued bans show that the tribunal still considered the integrity and competence findings serious enough to prevent both individuals returning to regulated work.
Fenech and Dunne have 14 days from the tribunal’s decision to seek permission to appeal. Unless further proceedings alter the outcome, the FCA will implement the prohibitions and revised financial penalties.
The ruling reinforces expectations that advice businesses must document suitability, supervise representatives, maintain reliable records, and ensure that commercial models do not divide responsibility in ways that leave customers without complete advice.
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