The operator of an investment firm that gave investors bad advice, lacked insurance, and sought to avoid the fallout from that bad advice, has been sanctioned by the U.K.’s Financial Conduct Authority (FCA).
The regulator banned Frank Breuer — the co-owner and director of Bluesky Wealth Management Ltd. — and imposed a £755,000 fine against him, after finding that he “repeatedly [acted] without integrity” and put the firm’s clients at risk.
According to the regulator, in 2019, Bluesky was providing advice on defined benefit (DB) pension transfers, without having the required professional insurance, which put investors at risk — and the FCA said that it was also “repeatedly misled” about the firm’s insurance position.
As a result, in late 2019, “Breuer agreed to restrictions introduced by the FCA to protect customers and the firm’s assets,” the FCA said.
However, it found that “Breuer ignored these restrictions and stripped the firm’s assets by paying himself large dividends, taking personal loans and moving money through connected accounts.”
“In making these payments, Mr. Breuer made a substantial direct financial gain to the detriment of customers,” the FCA said in its order against him — adding that these transfers were made with the knowledge that “Bluesky was very likely to have liability to customers for unsuitable DB transfer advice…”
Starting in mid-2022, the U.K.’s Financial Ombudsman Service upheld several complaints against Bluesky about the advice it gave around pension transfers — and, in early 2023, the regulator was notified that the firm refused to pay an ombudsman award.
Following that, the firm was put into insolvency in April 2023.
“Mr. Breuer sought to evade paying compensation due to customers as a result of his own bad pension advice and feathered his own nest in the process, stripping substantial assets from his firm,” said Therese Chambers, joint executive director of enforcement and market oversight at the FCA, in a release. “He repeatedly misled the FCA and flouted FCA restrictions. He’s not fit to work in financial services.”