FCA Moves to Ban and Fine Director and Financial Adviser Over £126m Pension Transfer Failings

The UK Financial Conduct Authority (FCA) has issued decision notices against director Richard Fenech and financial adviser Heather Dunne, proposing industry bans and combined financial penalties exceeding £670,000 for severe pension transfer advice failings. The regulator found that the pair operated a flawed advice model that placed customers' guaranteed defined benefit (DB) pension benefits at significant risk. Under the proposed enforcement actions, the FCA has decided to ban both individuals from working in the financial services industry, fining Mr Fenech £270,646 and Ms Dunne £399,817. Ms Dunne's fine was reduced from an initial £494,917 after she demonstrated that the original figure would cause serious financial hardship. Mr Fenech was the sole director of Financial Solutions Midhurst Limited (FSML) and was responsible for overseeing Ms Dunne, who operated as FSML's appointed representative under the trading name HDIFA. According to the regulator, Ms Dunne failed to act with due skill, care, and diligence by using a two-adviser model where she advised clients on transferring out of their DB pensions while another firm handled onward investment advice. Because of this structure, Ms Dunne was unaware of the destination of clients' funds when advising on transfers, exposing customers to unsuitable outcomes. During the relevant period, Ms Dunne recommended that approximately 92% of her clients transfer out of their DB pension schemes, leading to the transfer of more than £126 million in funds, frequently against the clients' best interests. Despite receiving warnings from FSML’s external compliance consultant regarding the risks associated with the two-adviser model, Mr Fenech failed to halt the practice or ensure that Ms Dunne’s advice met regulatory standards. The FCA also determined that both individuals failed to act with integrity after being involved in providing a dishonestly backdated appointed representative agreement to the regulator. Therese Chambers, Joint Executive Director of Enforcement and Market Oversight at the FCA, stated that customers must be able to trust pension advice and noted that both individuals demonstrated a complete disregard for customer needs in retirement. She affirmed that banning them from the sector was the appropriate course of action. FSML has since been dissolved and HDIFA has ceased trading. To date, the Financial Services Compensation Scheme (FSCS) has paid more than £770,490 in compensation to affected FSML clients, with potential total losses estimated at nearly £2 million. Both Mr Fenech and Ms Dunne have referred their Decision Notices to the Upper Tribunal. The FCA's proposed bans and financial penalties remain without effect pending the outcome of the Tribunal's determinations.