Pension introducers acted unlawfully, rules High Court
TWO pension “introducers” acted unlawfully and put thousands of people’s savings at risk, according to a High Court ruling in favour of the City watchdog over the transfer of £92m from pension schemes.
The judge ruled against two introducers, which made misleading statements and offered unauthorised advice that encouraged savers to transfer their life savings into risky investments, such as tree plantations and Brazilian property developments.
More than £69m of the total amount invested is expected to have been lost after it was placed in investments that were promoted by the two groups, Avacade Future Solutions and Alexandra Associates, and directors Craig Lummis, Lee Lummis and Raymond Fox.
A pension introducer is an unregulated marketing firm that is paid to introduce clients to a pension provider or a set of investments. It typically contacts people via a cold call offering a free pension review. Cold calling on pensions has since been made illegal.
The Financial Conduct Authority won its case against the two introducers, after it accused them of unlawful activity. Although pension introducers do not come under financial regulation, the Court ruled that both firms had arranged and advised on investments, which are regulated activities.
The firms were also found to have made false or misleading statements and marketed unapproved financial promotions via their websites and telephone calls. More than 2,000 people transferred £91.8m from their pensions into self-invested personal pensions sold by Avacade and Alexandra Associates, according to the FCA.