Active Wealth (UK) Limited
Active Wealth (UK) Limited were a financial advisory firm at the centre of the mis-sold pension transfer scandal of the British Steel Pension Scheme. They surrendered their pension transfer permissions following intervention from the Financial Conduct Authority (FCA) in relation to poor and faulty pension advice. However, this was too late for those who had already been wrongly persuaded to transfer their pensions out of the defined benefit (DB) scheme.
The firm’s director, Darren Antony Reynolds, took the decision to wind up Active Wealth in February 2018 before being declared in default by the Financial Services Compensation Scheme (FSCS) in March 2018.
A “feeding frenzy” from unscrupulous firms
Approximately 130,000 steelworkers, including deferred members, were faced with a decision – move their pension pots to a new plan, the British Steel Pension Fund 2 (BSPS II), or stay in their existing fund, which would move to the Pension Protection Fund (PPF). This triggered what has been described as a “feeding frenzy” from unscrupulous firms, including Active Wealth UK, who seized on the opportunity to make a large amount of money in commissions and fees through inappropriate pension advice.
In the case of Active Wealth UK, they used Celtic Wealth Management & Financial Planning as an unregulated introducer, who had attended a number of advisory roadshows delivered by the scheme trustees aimed at British Steel pension holders seeking more clarifications about the choices they should make.
Here, they tempted potential customers in with the proposition of a flat fee of £1,500 for exiting their existing DB scheme – a remarkably generous offer. All the pension-holder had to do was meet with an advisor of Active Wealth to receive guidance “tailored” to their “individual needs”.
This, of course, was not the case. Lured in by the promise of low fees, many unsuspecting pensions holders unwittingly saw their funds transferred into wholly inappropriate Self-Invested Personal Pensions (SIPPs). From here, funds were then swept away into unregulated illiquid assets (UCIS) such as Dolphin Trust and Gallium, a German Fund Solutions property bond that came with a 5% exit penalty on withdrawals.
Active Wealth’s SIPP partner of choice was Momentum Pensions, who also held authorisations in the UK, Gibraltar and the Isle of Man for SSAS and QROPS advice. Momentum Pensions also has links with the Alicante-based Continental Wealth Management, a firm suspected of duping hundreds of British pension-holders living in Spain into investing in high risk assets and loan notes, resulting in the loss of millions of pounds.
What was never disclosed to investors was the huge commissions payable on these UCIS – often in excess of 20%. Or the introduction fee paid by the SIPP providers, ranging from 3-5%.
Pension-holders cheated out of millions
Celtic Wealth’s director Clive Howells and Darren Reynolds, director of Active Wealth, were summoned by MP Frank Field and the Work & Pensions Committee to account for their professional conduct, or lack thereof. Given the millions lost by innocent pension holders who relied on advice from these two firms, it’s unsurprising that the two directors failed to show up.
This left Mr Field to conclude: “firms that are routinely advising people to take this route should be shut out of taking this type of business.’
If you were a member of the British Steel Pension Scheme and were persuaded to transfer out of the scheme by Active Wealth, Celtic Wealth or a similar firm you may have been the victim of poor pension advice and could be entitled to compensation.
At Beat the Banks, we think it’s wrong that pension holders have been tempted to gamble their financial security without proper guidance and we’ll do everything we can to help you. Call us on 0800 193 1234 for a free no-obligation chat with one of our expert advisors.