‘Dishonest’ pension advisers banned and fined by FCA

Credit: FCA

The Financial Conduct Authority has taken action against two pension advisers, banning both from working within financial services.

Darren Reynolds and Andrew Deeney of Willenhall-based Active Wealth have also been fined £2.21m and £397k respectively, following dishonest practices and disregard for customers’ interests.

Active Wealth was liquidated in 2018 and by June 2023, the Financial Services Compensation Scheme (FSCS) had paid compensation of more than £19.8m to 511 of Active Wealth’s former customers. At least 270 customers suffered losses exceeding the FSCS’s compensation cap of £50k. Were it not for this cap then the compensation amount would be more than £42.3m.

The FCA said Reynolds “dishonestly established, maintained and concealed a business model” which produced the highest commission for the adviser, rather than the best outcome for the customer. He went on to receive £1.01m in prohibited commission payments which were funelled through companies connected to Reynolds and were intentionally designed to disguise their true origins.

It believes that Reynolds dishonestly advised more than 670 customers, including 150 British Steel Pension Scheme (BSPS) members who had no option but to make a decision about their pension, to put their money into investments that he knew were not suitable for them.

In addition, the FCA was misled by Reynolds as he recklessly allowed the destruction of evidence in relation to the investigation.

Deeney also made personal financial gains by providing Active Wealth customers with unsuitable advice and secured more than £200k in doing so.

His conduct then continued at Fortuna Wealth Management Limited (Fortuna), a firm he established that purchased Active Wealth’s goodwill and client database. The FCA says here he repeatedly sought to mislead the watchdog about his role in advising customers to invest in high-risk investments.

Mr Reynolds applied for privacy in relation to his Notice, but the Upper Tribunal refused that application on 20 September 2023. Mr Deeney settled his case with the FCA in May 2022.

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.”