Keith Popplewell has been disqualified from acting as a director for a period of nine years, as a direct result of his firm failing to give suitable advice on transfers into self-invested personal pensions (SIPPs).
Many firms have suffered the effects of failing to treat customers fairly when considering SIPPs. A high proportion of complaints regarding this product have been upheld by the Financial Ombudsman Service in recent months, and a number of firms have been instructed by the Financial Conduct Authority (FCA) to cease conducting pension transfers.
However, Mr Popplewell’s disqualification, confirmed by the Insolvency Service in early April 2017, shows how inappropriate financial advice can have far-reaching personal consequences for a firm’s directors. The Service described his actions as a ‘misuse of position’.
Mr Popplewell’s firm, Sheffield-based The Pensions Office (TPO), failed to advise its clients as to the suitability of the underlying investment into which their SIPP contributions would be placed. At least 327 clients of the firm invested some £12 million into storepods. Storepods are a means of self-storage, and are most certainly regarded as high-risk investments.
The firm also failed to conduct six-monthly reviews of the ongoing suitability of the SIPPs for its clients’ financial circumstances.
The Insolvency Service statement said:
“Since at least 16 July 2012 Keith Popplewell misused his position as an approved person with the regulatory authority by failing to ensure that the Pensions Office properly advise its clients on the transfer of low-risk personal and occupation pension products into Sipps and failing to advise clients on the high-risk unregulated underlying investment, much of which was into Storepod investments.
“TPO also failed to take into account financial circumstances, needs and objectives and attitude to risk when advising clients and failed to ensure that adequate systems, controls, risk analysis and management information were put in place.”
Mr Popplewell reacted to his disqualification by making reference to “certain inaccuracies in the Insolvency Service report,” but added that he was unable to elaborate further as the matter was still being considered by his solicitors.
The Financial Services Compensation Scheme (FSCS) has already paid £1.5 million in compensation to the firm’s clients, and the final compensation bill is likely to be much higher – the FSCS says it has compensated just 61 clients to date, and that 169 claims are still being assessed.
The Pensions Office is no longer authorised to conduct financial services activity, after the FCA cancelled its permissions in May 2013. According to the FCA Register, Mr Popplewell is currently ‘inactive’.
Some claims management companies are becoming involved in the pensions advice arena, and are particularly active in pursuing claims on behalf of customers who were recommended SIPPs, when a regular personal pension may have been just as good, if not considerably cheaper.
Firms thus need to be confident that a SIPP is the best option for the client before recommending them. They must also note that they are responsible for ensuring that the underlying investments the SIPP contributions will be invested in are suitable.
The information shown in this article was correct at the time of publication. Articles are not routinely reviewed and as such are not updated. Please be aware the facts, circumstances or legal position may change after publication of the article.