A broker has managed to avoid a colossal FCA fine after a series of advisory failures.

Lloyd Arnold Pope, 55, (Ref no: LXP00027) and Peter Charles Legerton, 45, (Ref no: PCL00008) - two former Directors of the now liquidated advisory firm TailorMade Independent Ltd (TMI) have been banned from senior positions in financial services.

Pope was fined a colossal £93,800 by the FCA, however Legerton received a 100 per cent discount on his £120,226 fine due to the ‘serious financial hardship’ it would have incurred upon him, after evidence was reviewed.

In the event that he would have been fined, Mr Legerton would have qualified for a 30 per cent discount in accordance with the Authority’s executive settlement procedure, reducing the penalty to £84,100.

The FCA found that both men failed to assess the suitability of investments made through self-invested personal pensions (SIPPs) for its customers and failed to ensure that TMI’s compliance function was overseen properly. TMI clients typically had high risk investments and over half of the clients, around 923 individuals, invested in overseas property projects.

The FCA investigation found Legerton benefited financially from poorly managed conflicts of interest between TMI and an unregulated firm that introduced new business to TMI.

Acting Director of enforcement and market oversight at the FCA, Georgina Philippou, said Pope and Legerton exposed customers to risky investments without considering if the products met their needs.

“Their actions mean many customers face losing all of their hard earned pension funds and fell woefully short of the standards we expect of senior individuals,” said Georgina.

TMI provided advice to customers on transferring their existing pension funds into unregulated investments such as overseas property via SIPP’s. Between 2010 and 2013, 1,661 customers invested £112,420,985 in these investment products.

“As Directors with responsibility for the management and oversight of TMI, Pope and Legerton should have ensured that TMI considered the suitability of the investment products for customers but failed to do so,” added the FCA.

“They were also responsible for managing a number of conflicts of interest – including one created by commission payments to Legerton which he received when these investment products were sold to customers directly or through an unregulated firm which introduced customers to TMI for SIPP advice.  During the relevant period Legerton’s total income from TMI was £300,567.

“These payments created a conflict of interest and so should have been identified, and then disclosed to customers. However, no adequate disclosure was made.”

TMI has ceased trading and is now in liquidation, where the Financial Services Compensation Scheme is investigating claims made by TMI’s customers.

Pope and Legerton agreed to settle at an early stage of the investigation which reduced Pope’s fine from £134,073 down to £93,800. Legerton would have received a fine of £84,000, however he was unable to pay for it due to financial hardship.

The duos breaches have been defined as negligent rather than as intentional.