Alistair Burns was chief executive at TailorMade Independent Limited, which was dissolved in July.

Compensation of over £40 million has been paid on claims against his firm to date.

Mr Burns has been handed a £233,600 penalty by the FCA.

Mr Burns is appealing to the Upper Tribunal, which may uphold, vary or cancel the FCA’s decision.

The FCA aims to prohibit him from “performing any senior management or significant influence function in relation to regulated activity in financial services”.

The regulator claimed Mr Burns “failed to ensure that TMI provided suitable advice to its clients and failed to ensure that TMI managed fairly and clearly disclosed his own personal conflicts of interest and the conflicts of interest relating to other individuals at TMI”.

As of September 2016 the Financial Services Compensation Scheme has upheld 919 claims of unsuitable advice against TMI, with compensation of over £40 million paid to date.

More than half of the affected customers invested in a firm specialising in overseas property which subsequently went into liquidation with the result that the entirety of those investments was lost, officials said.

An FCA statement, explaining the penalties it has issued, read: “Between January 2010 and January 2013, TMI provided advice to customers who were considering transferring or switching their existing pension funds via self-invested personal pensions (SIPPs) into unregulated investments such as green oil, biofuels, farmland and overseas property (Alternative Investments).

“During this period, 1,661 customers invested £112,420,985 in Alternative Investments, many of which were not typically permitted by their existing pension schemes.

“In the FCA’s view, the personal recommendations process used to advise customers, for which Mr Burns was jointly responsible, was inadequate.

“The process failed to take into account a customer’s individual circumstances, demands and needs, and instead resulted in personal recommendations being made predominantly on the basis of the customer’s objective of using their existing pension funds to purchase Alternative Investments.”

The Decision Notice sets out the FCA’s view that Mr Burns “received significant financial benefit from his positions as a director and shareholder of an unregulated introducer also operating under the ‘TailorMade’ name, which referred clients to TMI”.

The FCA stated: “As a director, Mr Burns was required to take reasonable steps to ensure TMI complied with regulatory standards. In the FCA’s view he did not do so.

“The Authority has decided that he is not fit and proper to perform senior management or significant influence functions in relation to regulated activity in financial services.

“This is on the basis of his lack of competence to perform such functions. The FCA has not found that Mr Burns deliberately or recklessly failed in his duties.”