He will also pay £850,000 to the Financial Services Compensation Scheme (FSCS).

The regulator said Mr Steel provided unsuitable advice to customers to transfer out of defined benefit pension schemes, including the British Steel Pension Scheme (BSPS).

It said he also showed a lack of honesty and integrity in selling his client book for less than its value to himself. It meant that customers who had lost out from the poor advice could not pursue the firm for redress. 

Between 2015 and 2018, more than 480 clients were given defined benefit transfer advice by EMF. More than £140m of pension assets were transferred as a result.

Overwhelmingly (86%), the advice failed to meet the required standards, the FCA said. In providing the advice, Mr Steel failed to collect the right information and/or disclose the risks of transferring. 

As a result of his conduct in selling his client book, the FCA sought and obtained a freezing injunction, and brought proceedings in the High Court seeking redress for customer losses. It agreed to settle the proceedings on the basis of Mr Steel’s agreement not to contest the FCA’s penalties. 

Therese Chambers, joint executive director of enforcement and market oversight at the FCA, said: “Mr Steel failed to provide suitable pension transfer advice. But he also failed to act with honesty and integrity when he improperly sold the firm’s assets for less than their value - to himself - so that he could enjoy the profits of the business without the burden of the risks that he had created.

'We are determined that those who fail in their duties to their customers take responsibility for paying towards redress and do not expect the FSCS, and the vast majority of firms who do the right thing, to pick up the tab for their failings.”

The FCA fine Mr Steel £3,694,400 but agreed not to enforce the fine provided Mr Steel paid £850,000 to the FSCS. The figure represents substantially all of Mr Steel’s remaining assets and ensures that he will contribute to the cost of compensating customers who received his poor advice.

Without the settlement, most or all of Mr Steel’s assets would have been spent on the High Court proceedings rather than compensating consumers, the regulator said.

As at 27 June 2023, the FSCS has paid out £1,752,125.71 in relation to claims valued at £4,539,474.73 to clients to whom EMF has provided unsuitable pension transfer advice. 

Late last week the FCA banned Pembrokeshire BSPS adviser Denis Lee Morgan; the FSCS has so far upheld 213 claims against his firm Pembrokeshire Mortgage Centre Ltd.

Earlier in the week The FCA banned financial adviser Mark Abley of County Capital Wealth Management Ltd and told him to pay £106,100 to the Financial Services Compensation Scheme (FSCS) for poor pension transfer advice to BSPS members.

There has been a string of other enforcement actions against BSPS-linked firms in recent months.