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Warrington-based financial planning company fined for lack of pension transfer advice


Investing in pension accounts and retirement funds is vital to being able to retire comfortably and reduce the risk of financial difficulty.

This is increasingly more applicable now as the number of people receiving the state pension has fallen in recent years, with the Department for Work and Pensions reporting that 12.6 million people were receiving the State Pension as of 2019. Yet, alongside the State Pension many people also rely on company pension funds, in the belief that the company will act in their best financial interest.

More than 100 of LJ Financial Planning’s (LJFP) clients thought the same thing and trusted the company to invest their money. Unfortunately, LJFP left them halfway through the process, and the company was fined for their negligence.

LJFP advised their pension account holders to transfer their money into self-invested personal pensions (SIPPs). A SIPP gives the owner access to a wide range of investment opportunities that are free from capital gains and income tax. It’s a great venture for people who want more control over their money, potentially netting them a bigger pension in the future. However, they either need to be an experienced investor or work with a financial planner, so they can make informed decisions.

However, after LJFP recommended 114 of their clients to move their pensions to SIPPs, they did not give any additional advice. As a result, their account holders invested over £6 million in high-risk, esoteric, and illiquid assets. For their negligence, the Financial Conduct Authority (FCA) fined LJFP £107,200 for damages. They were also required to help the victims earn their money back.

“These failings were especially serious because LJFP facilitated the transfer of these investors’ pensions into high-risk investments without assessing whether the investments were suitable for [non-experienced] investors,” said Mark Steward, FCA’s executive director of enforcement and market oversight.

Steward further showed his disappointment by stating that the £6 million SIPP investments were now “worthless,” as they were already lost in the stock market. Many of the victims were also already nearing or already in retirement, making them more vulnerable to significant losses.

In a separate article from a couple of years ago, pensions adviser Robert Shaw expressed that upcoming pensioners may be looking for different, riskier investments because what the state gives is often not enough. “We are lucky to receive over £5,000 per annum, meaning we have to survive 20 years to receive our initial investment back,” he informed. But he also warned that investors would fail if they have “little understanding of the mechanics.” This is why the guidance of a reliable financial adviser is so important.

Incidentally, this recent SIPP incident is not LJFP’s first oversight in the field. Last November, a report on FT Adviser talked about how the financial planning company compensated one of its clients after one of its advisers neglected an unregulated SIPP investment.

Trust is important when building up one’s funds for retirement. LJFP is working to make amends at the moment, but only time will tell if they earn back the trust of their clients.


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  1. Pingback: Warrington-based financial planning company fined for lack of pension transfer advice – Gary Skentelbery | Warrington Gazette

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