Dunne and Fenech: the Tribunal recalibrates FCA penalties, not principles

The Upper Tribunal has upheld the FCA's decision to ban Richard Fenech and Heather Dunne from financial services, while cutting their fines to £41,230 and £16,046 respectively (FCA). The case, which involved more than £126m being transferred out of defined benefit schemes between April 2015 and June 2017, is one of the most consequential DB transfer enforcement outcomes to reach the Tribunal in recent years (FCA). What the Tribunal preserved, and what it pared back, tells senior leaders more about the direction of FCA enforcement than the headline ban.

The ban itself was never really in doubt once the Tribunal accepted that both individuals had acted dishonestly by providing a backdated appointed representative agreement to the FCA (FCA). Dunne was found to have falsely claimed she had advised on certain pension schemes before doing so, and Fenech failed to properly oversee her work (FCA). Therese Chambers, the FCA's executive director of enforcement and market oversight, said the Tribunal ruling confirmed that 'the FCA must be able to rely on those it regulates at all times, including in periods of stress and high pressure' (FCA). That framing matters: for the FCA, dishonesty toward the regulator is treated as a categorical disqualifier, separate from the technical merits of any advice given.

The more interesting move is the Tribunal's reworking of the financial penalties. The FCA had calibrated both fines on the assumption that all of Dunne's advice breached regulatory requirements. The Tribunal disagreed, ruling that only 18% of her clients received unsuitable advice, and that only the income Fenech earned from his relationship with Dunne should count towards his fine (FCA). Dunne had advised roughly 92% of her clients to move out of DB schemes, a rate that on its own would have raised supervisory alarms (FCA). The Tribunal has effectively said that unsuitability must be proven client by client, and that penalty maths cannot be built on presumptions about the whole book.

For senior leaders, particularly at advice networks, principal firms and any business running appointed representative arrangements, this creates a two-track message. Character-based misconduct, and specifically misleading the regulator, will survive appeal intact. Fine quantum, by contrast, is now more contestable on evidential grounds. That has implications for how boards should think about enforcement provisioning, settlement strategy and the internal file review work that underpins any FCA response. It also lands alongside the FCA's stated intention to make investigations 'both rigorous and timely' under its evolving enforcement approach (FCA). Faster investigations with tighter evidential thresholds is a different operating model from the one many firms have prepared for.

The DB transfer market has been under specific FCA scrutiny since the 2021 finalised guidance on improving standards (FCA), and principal firm oversight of appointed representatives remains a live supervisory priority. Boards whose business models depend on AR structures should read this ruling less as vindication of anyone, and more as a reminder that oversight failures and evidential rigour will both be tested, in that order.

The practical implication: individual accountability for honesty with the regulator is close to absolute, but the arithmetic of penalties is fair game on appeal.