Blog written by Angharad Phillips | Trainee Solicitor, Financial Mis-Selling
The Financial Conduct Authority (FCA) has prohibited Omar Hussein, former director and senior financial adviser at Consumer Wealth Ltd (CWL), from working in financial services. Mr Hussein has also been fined £116,000 for providing ‘reckless and unsuitable’ pension switching advice.
According to the FCA website, Mr Hussein advised customers to switch their existing pensions where it was often unnecessary and not in their best interest.
Between 2015 and 2017, Mr Hussein and Consumer Wealth Ltd advised 620 customers to switch their pensions into a self-invested personal pension (SIPP) containing significant investments in Portfolio 6 (P6), a high-risk investment offered by the Discretionary Fund Management firm, which has since gone into administration, Greyfriars Asset Management LLP (Greyfriars). This advice put an estimated £13.5m of customers’ retirement savings at risk.
The FCA say Mr Hussein disregarded clear statements and risk warnings about P6 contained in Greyfriars promotional material and claimed that customers investing in P6 were ‘experienced investors’ when there was no reasonable basis for doing so. It also alleges that his firm charged customers for an on-going advice service which it did not actually provide.
The FCA’s findings that Mr Hussein acted recklessly and abused a position of trust when advising clients who were often financially inexperienced, vulnerable and had no or limited capacity for loss are particularly concerning.
By his own admission, Mr Hussein was aware of the FCA’s pension alerts which reminded advisers that when advising customers to switch to a SIPP, they must assess the suitability of the underlying investments to be held in the SIPP and also warned that non-mainstream investments were unlikely to be suitable options for the majority of retail customers.
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 so far. Customers that are concerned that they may be affected should contact the FSCS.
If you were a customer of Consumer Wealth Ltd and are concerned about advice you received from the firm, then please contact us for a free initial consultation.