The Financial Services Compensation Scheme (FSCS) has declared Glasgow-based financial advice firm Cowley & Miller Independent Financial Services in default.
The firm's pension transfers became subject to pre-sale review on 10 April 2018, with the Financial Conduct Authority (FCA) stating that it must refrain from advising on any new or existing pension transfers of defined benefit (DB) or safeguarded benefits for clients unless reviewed by an independent and suitably qualified third party, according to the FCA register.
On 21 June 2021, the FCA restricted the firm from disposing of its assets and client base without its written consent, according to the FCA register. Additionally, the firm applied to cancel its FCA authorisation on 1 December 2021, according to the FCA register.
The firm has two directors, namely Judith Cowley and James Park Miller, both of whom held the role of pension transfer specialist, among others. Cowley was also money laundering reporting officer, while Miller held the role of compliance oversight, according to the FCA register.
The FSCS told International Investment's sister brand Professional Adviser it has received 34 claims from former customers of the firm, all for unsuitable pension transfer advice. The FSCS said: "This company has failed, or is in special administration" when declaring it in default.
The firm commenced creditors voluntary liquidation on 2 March 2022, as per Companies House records, with meeting minutes stating that the company "cannot, by reason of its liabilities, continue its business."
The Financial Ombudsman Service (FOS) has upheld 10 cases against the firm, all of which are related to pension transfer advice.
In one such case published on the FOS website, the client, Mr M said that the firm advised a transfer his stakeholder pension to a Self-Invested Personal Pension (SIPP), whose funds were invested in carbon credits, but the investment subsequently became illiquid. The investment into carbon credits represented 10% of Mr M's net wealth.
The client filed a complaint with the FOS, and the ombudsman found in his favour, finding the advice to be unsuitable.
The ombudsman said: "Mr M relied on Cowley & Miller's advice and I don't think he should've been advised to transfer his pension, knowing the funds would be invested in carbon credits.
"The transfer to the SIPP was only necessary to facilitate the investment in carbon credits and due to Mr M's limited fund size, and the increased charges involved, I don't think the SIPP was suitable."
The FOS ordered the firm to compensate Mr M for the loss he suffered and return him to the position he would have been in if he had received suitable advice.
