FCA blasts financial adviser after British Steel pension scandal

A ‘dishonest’ financial adviser at the center of British Steel’s pensions scandal was yesterday fined and banned from working in the sector.

Darren Reynolds was fined £2.2 million by the Financial Conduct Authority after he ‘duped’ savers into leaving their gold-plated pension schemes and putting their money into ‘risky investments’.

The regulator said he ‘dishonestly’ advised more than 670 people – including 150 in the British Steel Pension Scheme – with 511 losing £42.3m, while receiving more than £1m in compensation.

Announcing the fine and ban, the FCA said Reynolds had ‘a clear disregard for the interests of customers in favor of his own personal gain’.

Therese Chambers, joint executive director for enforcement and market surveillance at the FCA, said: ‘This is one of the worst cases we have seen.’

Campaigners for steelworkers who suffered losses in what has been described as ‘the biggest pensions scandal in a generation’ welcomed the ruling but warned it was ‘a pyrrhic victory’ as Reynolds – who has appealed – ‘saw many ruined lives in his leaves a wake’.

The scandal dates back to 2017, when members of the British Steel Pension Scheme – including many Port Talbot workers – were given the choice of leaving their savings in the old scheme or joining a new, less generous scheme.

With the old scheme likely to fall into the Pension Protection Fund, resulting in a 10 percent haircut for savers, and the new offer also likely to earn members less, many employees were encouraged to withdraw their money in full and put it into a piggy bank to stop. private pension pot. A total of 8,000 steelworkers were convinced to hand over a total of £2.8 billion – some by financial advisers such as Reynolds and his firm Active Wealth.

Reynolds, 53, was not the only financial advisor involved in the scandal and did not just target steelworkers. Another, Andrew Deeney, 57, was also banned by the FCA yesterday and fined £397,400 after raking in £200,000 in commission payments with unreliable advice.

The FCA said Reynolds ‘dishonestly established, maintained and concealed a business model that incentivized recommending products that delivered the highest commission for the adviser rather than the best outcome for the client’. The FCA said £19.8 million has been paid out to 511 former Active Wealth customers by the Financial Services Compensation Scheme. But at least 270 people lost more than the £50,000 compensation limit.

Chambers said: ‘Mr Reynolds, who allowed evidence to be destroyed and who has consistently tried to avoid responsibility, and Mr Deeney, have lied and lied again. Primarily to mislead people into leaving safe pension schemes and putting money intended for their retirement into unsuitable, risky investments.

‘And then try to hide their misconduct from us. There is no place for such people in our industry.’

Financial adviser Al Rush, who has helped British Steel pensioners regain their finances, said: ‘For these steelworkers and their families, his (Reynold’s) actions can never be made up for.’