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British Steel IFA compensation payouts top £500k

IFA Active Wealth, which found itself at the heart of the British Steel Pension Scheme saga, has cost the Financial Services Compensation Scheme more than half a million pounds so far, Money Marketing has learned.

Data provided to Money Marketing about the firm that was declared insolvent in February shows the lifeboat fund has awarded compensation of £531,000 so far.

It has already paid £442,000 to 14 claimants and is in the process of paying £89,000 to three more.

The FSCS has received 211 claims in total about Active Wealth, of which 162 are open and 43 are closed.

Seventeen have been rejected, but six more have been re-opened.

The greatest number of claims, 126, relate to transfers to a personal pension, which accounts for nearly £452,000 of compensation.

The second highest number of claims, 42, relate to Sipps and have accounted for £80,000 of the payouts.

Thirty four claims are about other pension advice and four are classificed as concerning investment portfolios.

Counting the human cost of the British Steel saga six months on

There have been allegations Active Wealth breached duties under conduct of business rules to ensure personal recommendation were suitable for clients and it failed to carry out appropriate due diligence in the context of British Steel.

In December 2017, Active Wealth managing director Darren Reynolds was asked to appear before MPs on the pensions select committee, but did not attend the hearing.

Earlier today Money Marketing reported the FSCS has also received more than 300 claims against the collapsed Lifetime Sipp Company in the last six months.

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Comments

There are 7 comments at the moment, we would love to hear your opinion too.

  1. And what, if any, sanctions were imposed on Darren Reynolds for not bothering to appear before MPs on the pensions select committee?

  2. It begs the question, where does negligent bad advice end and something premeditated and more serious begin?

    As Julian has said we need to see those responsible held accountable, with sanctions against the individuals instead of being able to hide behind limited corporate liability.

  3. “Due diligence of British Steel pension scheme”? What due diligence is required on a bust scheme?

    • “There have been allegations Active Wealth … failed to carry out appropriate due diligence in the context of British Steel”

      The due diligence would be on the member’s various outcomes under BSPS2 and PPF as well as the “run off with the lot” option given to a number of clients.

  4. I have been explaining to my clients for some time how they will be paying for bad advice in respect of DB transfers including the British Steel ones. Strangely enough they dont seem wildly enthusiastic!

  5. Where is their PI insurer in all this? PI should be an annual policy and as such all these claims should be met by them with only the policy excesses being picked up by the FSCS. Any outstanding PI premiums not paid should simply be a matter between the PI Insurer and the Receiver. I appreciate it might mean additional info is required at renewal but if PI Insurers are not prepared to offer PI, they could it not be seen as an early warning system to the FCA to have a closer look at a company’s operations?

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