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October 2, 2023

FCA to fine Active Wealth adviser £2.2m for ‘dishonest’ pension advice

The Financial Conduct Authority says it’s decided to fine Darren Reynolds of Active Wealth (UK) Limited £2,212,316 after he “dishonestly” advised more than 670 customers to put their money into investments that “he knew were not suitable for them”

This includes 150 British Steel Pension Scheme (BSPS) members.

The press release issued by the Regulator also alleges Mr Reynolds had a ‘clear disregard for customers’ interests in favour of his own personal gain”.

It said: “He dishonestly established, maintained and concealed a business model which incentivised recommending products which produced the highest commission for the adviser rather than the best outcome for the customer, and exploited this to the detriment of Active Wealth’s customers so that he could receive £1.01m in prohibited commission payments.”

According to the FCA the payments were ‘funnelled’ via companies connected to Reynolds and were ‘intentionally designed to disguise their true origins.’

It went on to say that Mr Reynolds had ‘dishonestly misled the FCA and recklessly allowed the destruction of evidence relevant to its investigation.’

The FCA have also made the decision to ban him from working in financial services. Mr Reynolds has referred his decision notice to the Upper Tribunal for consideration.

Mr Reynolds is not the only adviser linked to Active Wealth UK Ltd to be issued with a fine and ban.

The FCA also fined Andrew Deeney £397,400 and banned him from working in financial services.

According to the Regulator Mr Deeney made personal financial gains exceeding £200k by providing unsuitable advice to Active Wealth customers in order to “dishonestly receive banned commission payments”.

The FCA says Mr Deeney’s misconduct then continued at Fortuna Wealth Management Limited (Fortuna), a firm he established which bought Active Wealth’s goodwill and client database.

It added that Mr Deeney “repeatedly sought to mislead the FCA” regarding his role in advising customers to invest in high-risk investments.


“One of the worst cases we have seen”

Therese Chambers, Joint Executive Director of Enforcement and Market Oversight said: “This is one of the worst cases we have seen. Mr Reynolds, who allowed evidence to be destroyed and who has consistently sought to evade accountability, and Mr Deeney, lied and lied again.”

“First, to dupe people into leaving safe pension schemes and placing money meant for their retirement in unsuitable, high-risk investments. Then to try and hide their misconduct from us. Their motivation was based on self-enrichment. Such people have no place in our industry.”

Mr Reynolds had applied for privacy in relation to his Notice, but that application was refused by the Upper Tribunal on 20 September 2023.

Mr Deeney settled his case with the FCA in May 2022.


Compensation claims against Active Wealth

According to the FCA figures, the Financial Services Compensation Scheme (FSCS) had paid over £19.8 million in compensation to 511 of Active Wealth’s former customers. This is up to June 2023.

It says that at least 270 customers have suffered losses in excess of the FSCS’s compensation cap of £50,000.

Without the cap the FCA says the compensation amount would be more than £42.3 million.

Important Information!

You are not required to use our services to pursue your claim. You can also seek further advice or shop around subject to any time limits within which a claim must be made.

It is possible for you to present the claim for free, either to the firm or person against whom you wish to complain or to the statutory ombudsman (Financial Ombudsman Service or Pension Ombudsman Service) or the Financial Services Compensation Scheme, whichever is applicable to your claim.