Richard Brian Fenech & Anor v The Financial Conduct Authority

A reference to the Upper Tribunal is a complete rehearing, with the burden of proof on the Authority. In assessing pension-transfer advice, suitability is a matter of judgment. Missing information does not automatically prevent a suitability assessment; its materiality must be considered in context. However, a pension-transfer specialist must obtain information necessary to assess the client’s circumstances, capacity for loss, objectives and the disadvantages of transferring. A two-adviser model may be permissible, but advice cannot routinely ignore the receiving scheme, investments or charges where those matters materially affect suitability or the information given to the client. Regulatory limitation may prevent a penalty based on a particular form of misconduct, while leaving that conduct relevant to prohibition. Dishonesty is assessed by applying the Ivey test, with all the circumstances taken into account.

The Authority issued Decision Notices imposing penalties and prohibition orders on Richard Fenech and Heather Dunne. Ms Dunne was a pension transfer specialist and appointed representative of Mr Fenech’s firm. The allegations concerned unsuitable or non-compliant transfers from defined benefit to defined contribution schemes, inadequate supervision, recklessness and dishonesty in providing a backdated appointed-representative agreement.

The Authority relied on a sample of files which had initially found a majority of advice suitable but was later recalibrated so that all files were treated as non-compliant. It accepted that reliance on Ms Dunne’s transfer-in-isolation model was out of time for penalty purposes. The central issues were the Tribunal’s jurisdiction, the effect of limitation, the reliability and statistical use of the sample, compliance with the applicable rules, supervision, recklessness and dishonesty.

1. Jurisdiction and limitation. A reference was a complete rehearing. The Authority bore the burden of proof. Under Financial Services and Markets Act 2000, s 66, the Authority was out of time to impose a penalty on Ms Dunne based on the transfer-in-isolation model, and could not rely on that model as the basis for recalibrating the sample for penalty purposes. The model remained relevant to prohibition issues and to Mr Fenech’s reference.
2. Sample and suitability. The Authority’s recalibration of files previously assessed as suitable was wrong because the absence of receiving-fund information did not automatically prevent a suitability assessment. The materiality of missing information had to be assessed in context. On an independent review, advice was suitable in ten of sixteen cases and unsuitable in six. The statistically valid sample supported a finding that at least 18% of Ms Dunne’s clients had received unsuitable advice, but did not establish a higher percentage.
3. Ms Dunne. She breached SoP 2 by giving unsuitable advice to at least 18% of clients and through systemic failings. These included inadequate checking of reports, use of unregulated staff to issue preliminary transfer advice, failure to obtain necessary information in five sample cases, unclear and insufficiently tailored reports, inadequate prominence given to lost defined-benefit protections, and provision of confirmation documents before the written advice. Her transfer-in-isolation model was unreasonable because it assumed cash and nil charges despite the temporary nature of that assumption and the use of a 5% growth rate.
4. Mr Fenech. As principal and holder of the relevant controlled functions, he failed to provide adequate management and oversight and breached SoP 7. He was not reckless: before the 2017 Alert, the evidence left a reasonable uncertainty about the model’s compliance, and he reasonably believed that Ms Dunne had changed her approach after the Alert.
5. Dishonesty. Applying Ivey, both Applicants acted dishonestly in signing and supplying a backdated appointed-representative agreement. Ms Dunne was additionally dishonest in sending confirmation documents to ceding schemes before giving the relevant advice. The pressure on the Applicants and the isolated or client-focused context affected the circumstances but did not prevent findings of dishonesty.
6. The determination of penalties and prohibition orders was deferred to a further hearing in June 2026.

This was a reference to the Upper Tribunal against Decision Notices issued by the Financial Conduct Authority. The Tribunal conducted a complete rehearing, made findings of fact and law, and deferred the consequential determination of penalties and prohibition orders to a further hearing in June 2026.