The FCA found Mr Shaw failed to ensure that TMI assessed the suitability of investments made through self-invested personal pensions for its customers, and failed to ensure that TMI identified and managed its conflicts of interests.
Mr. Shaw benefitted financially from being the director and shareholder of TailorMade Alternative Investments, an unregulated introducer which referred clients to TMI. The financial benefit he received created a conflict of interest with his duty to TMI’s customers to run the business compliantly. No adequate disclosure to customers was made.
The issue was compounded by Mr Shaw’s failure to act when TMI’s external compliance consultants warned it of the need to consider and disclose conflicts of interest to customers.
TMI provided advice to customers on transferring their existing pension funds into unregulated investments such as green oil, biofuels, farmland and overseas property via SIPPs. Between 2010 and 2013, 1,661 customers invested £112,420,985 in these investment products, many of which were not typically permitted by their existing pension schemes. More than half of the affected customers invested in overseas property operated by the Harlequin group of companies, which are under investigation by the Serious Fraud Office.
TMI has ceased trading and is now in liquidation. The FSCS is investigating claims made by TMI’s customers.
Georgina Philippou, acting director of enforcement and market oversight at the FCA, said:
“Robert Shaw exposed customers to risky investments without considering if these products would meet their needs. In addition, he personally benefitted from sales of these products without revealing to customers the full extent of the benefits he received. His actions mean that many customers faced losing all of their hard earned pension funds. This is not the conduct we expect of senior individuals.”
