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British Steel IFA hit with 30 FSCS claims in first fortnight

The FSCS has received more than 30 claims against collapsed advice firm Active Wealth just two-and-a-half weeks after opening the doors to compensation against the company.

Active Wealth went into liquidation on 12 February after attracting attention for its role in advising members to transfer out of their final salary schemes at British Steel.

The firm was declared in default by the FSCS on 26 March. While no compensation payments have been made to date, 34 claims are already in process and are being evaluated by the FSCS.

Midlands-based Active Wealth is one of 10 advice firms that has stopped giving pension transfer recommendations in light of the British Steel pension saga.

Law firm Clarke Willmott partner Phil­ippa Hann says: “I anticipate the FSCS will receive a lot more claims.”

“I am being instructed by a number of people who transferred out of British Steel Pension Scheme and other final salary schemes on the advice of Active Wealth.

“They are instructing me to seek other ways options of redress from those involved in the transfer process and investment of their money.

“These other entities include a discretionary investment manager, an algorithmic trading company, a fund manager and the introducer Celtic Wealth Management.”

The other nine advice firms to have cease transfer advice are Vintage Investment Services, Retirement & Pension Planning Services, West Wales Financial Services, Pembrokeshire Mortgage Centre, Mansion Park, Bartholomew Hawkins, Inspirational Financial Management, County Capital Wealth Management and Acklam Financial.

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Comments

There are 15 comments at the moment, we would love to hear your opinion too.

  1. Trying to think how the FCA could have picked up on the increased DB pension transfer activity at this firm? Maybe that would have raised the alarm and they could have nipped out for a visit. Gabriel is only 6 monthly after all. Perhaps those firms involved in DB work need to flag each DB transfer case recommended to the FCA on a monthly basis e.g. scheme name, CETV amount and top 3 reasons the transfer was done? Then, maybe someomne at Canary Wharf could analyse the data and do something with it. Reading between the lines this case seems closer to out and out fraud and illegality than regulated advice.

    • There are many ways this could have been picked up earlier. I would imagine that the pension freedoms would have put the FCA on high alert to this sort of thing in general, not just the BSPS. The relevant information could have been easily gathered from advisers, pension schemes and providers.

      Having identified this as a high risk area I would guess that some sort of surveillance program was put in place to spot early problems. The question then arises as to whether they were looking in the right direction or, having looked in the right direction, whether they acted as quickly as they could and should have done.

  2. Robert Milligan 11th April 2018 at 1:27 pm

    And the PI providers are laughing all the way to the bank!!! This must be addressed, Why should I and others who do not have DB transfer permissions have to await the Interim Levy this debacle will cost. These firms should “Not Be Allowed” to “out-source” their financial responsibility’s, by closing their Regulatory Accountability, Directors of Regulated firms should be held legally accountable to the FCA.

  3. So are we going to have qualified transfer specialist reviewing the cases, or someone on a tick box exercise who has no idea about qualifying the advice, before billing existing IFAs, most of whom are not involved in this very specialist area of advice, for the compensation costs.
    And are the complainants going to have to put back all the funds they have spent from their transfer out, to be put back into the scheme?
    Be interesting to find out how many complaints have been instigated by 3rd party representatives and what they are making out of the deal, you can bet they are not regulated and paying out annual fees. If they are charging a percentage, is this not disadvantaging the client or does FOS add that into the equation for putting the client back in a position they would have previously been?

    • Yes, surely reinstatement should be the first avenue to explore, with the only claim/s being made against the FSCS any shortfall between the original CETV and the sum now recoverable.

      What is the stance of the BSPS on such a procedure?

    • Robert Milligan 16th April 2018 at 12:56 pm

      Most of the “Claims Chaser’s are firm’s of solicitors who are using scurrilous Pillar to Pillar Funding to fund them through the time taken to potentially recoup the costs out of the clients financial settlement, which basically means the client ends up remaining out of pocket, and “We” settle the bill. Those cases which they do not win are finical loss’s to the P2P lender, not the Solicitor, this should be looked into by the FCA

  4. We all know that you can’t prove a projection wrong with another projection. Changing the growth rates in a projection doesn’t (despite the Daily Mail’s protestations otherwise) change the investment, it just changes the…er…projection. In effect you never really know the true quantum of any loss, if any, until after the event.

    Nevertheless, the FCA and other regulators have tended to accelerate the compensation process to a time before any loss has been fully cruystallised and that does by necessity use a projection. Provided there is quite a bit of experience under the bridge then the “expected” “outcome” is at least part experience and only part projection. It’s technically wrong, but you do probably need to start the compensation process before it finally crystalises if the investment is demonstrably drifting wider from plan.

    But how can you have any clue that you need to compensate these BSPS people who have barely left one scheme and joined the new one? Do you really yet know if the advice is entirely wrong?

    Just a debating point.

  5. The only word that springs to mind is depressing……..

  6. And of course those who don’t run around doing dodgy things will end up paying for the cowboys again.

    Let me also guess that the director/s of Active Wealth have or shortly will pop up somewhere else, called something different having rid themselves of their old liabilities.

    Maybe I’m just being cynical..

  7. Don’t need a claims handler to take it to the FSCS, the £50k limit is paltry enough as it is without legal fees eating into it.

  8. Jonathan Willis 11th April 2018 at 4:34 pm

    LBC are already advertising pension miselling claims companies. Next PPI has arrived. The directors of Active Wealth should be held accountable as should have been the case with Fred Goodwin, Andy Hornby and the other banking croneys who got off Scot free as is always the case. And the rest of the industry there to pick up the pieces for doing an honest hard days work.

  9. This guy at active wealth was on the fca radar in 2016 however as usual the horse has bolted. What i do hope happens here is that this guys house and possessions are taken from him to pay the fscs payout. But hey bet he lives in a tent somewhere having spent all the money and its left to us to foot the bill. Frank Field tried to get this guy to turn up at the select committe sorry frank like the fca your organisataion is all wind and no action get a proper kite to fly

  10. It is clear that either someone claiming to be a qualified PTS was signing off transfers and totally disregarding FCA COBS rules on DB transfers, or they were not qualified and doing so unauthorised.

    In both cases I cannot see how the individuals are still able to retain their authorisation, the company may have gone but those responsible have not and should be held to account.

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