The UK's Upper Tribunal has upheld the Financial Conduct Authority’s decision to prohibit Alistair Burns, the director of financial intermediation firm TailorMade Independent, from performing any 'significant influence' or senior management function and decided that he should pay a £60,000 fine.

The tribunal has decided that Burns lacks the necessary competence and capability to perform his former 'CF1' (controlled function one, a director) job. In its published decision notice, against which Burns appealed to the tribunal recently, the FCA wanted to fine Burns £233,600.

Between January 2010 and January 2013, TailorMade Independent provided advice to 1,661 customers who were thinking of transferring or switching their pension funds by means of self-invested personal pensions or SIPPs. According to the tribunal's findings, TailorMade Independent gave its customers wholly unsuitable advice to transfer pension benefits into a SIPP which was to be invested in either a single, or a very small number of, inherently risky overseas property investments.

The tribunal also found that Burns had a significant financial interest in the outcome of the unsuitable advice that TailorMade Independent was giving to those customers. He co-owned and co-directed an unregulated introducer, also operating under the 'TailorMade' name, which referred clients to TailorMade Independent. The introducer was paid significant amounts of commission by the provider of the alternative investment product concerned when TMI advised a customer to transfer their pension into a SIPP, and the customer subsequently invested in that alternative investment following the pension transfer. Typically, neither TailorMade Independent nor the introducer of the payment of this commission told the customer about this commission or its value.

The tribunal's judgment, at note 337, states: "It is quite clear that during his time at TMI, he had no appreciation of the functions of the governing body of a regulated firm, as opposed to the role of individual directors. It is apparent from the submissions that he made to the Tribunal, as regards his view that it was reasonable for him to have relied entirely on [external pension transfer specialist] Mr Lloyd Pope, that despite his subsequent training courses he still does not understand the respective roles of the board and its individual directors."

The FCA has never considered Burns' wrongdoing to be deliberate or reckless; he relied on the advice of his external compliance consultant and of qualified and experienced board colleagues who did not raise concerns about TMI's business model.