FSCS prepares to pay claims against British Steel IFA Active Wealth

FSCS-Piggy-Bank-500x320.jpgThe Financial Services Compensation Scheme is preparing to declare IFA Active Wealth in default, after it was revealed this week the firm has entered liquidation.

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

The FSCS says it will declare Active Wealth in default and start to pay claims for compensation once it is satisfied the firm cannot pay claims itself.

The lifeboat fund is working with the FCA to understand Active Wealth’s position.

FSCS chief executive Mark Neale says: “We are working as quickly as possible to provide some certainty for customers, and will provide further updates on our website as more information becomes available.”

In a letter to MPs on the work and pensions select committee published last week, Active Wealth director Darren Reynolds explained how the firm calculates ongoing charges.

Pensions Ombudsman investigates 150 British Steel transfer value complaints

Reynolds said in the letter: “In most cases ongoing advisory service would amount to five to six hours of work, based on hourly rate of £100. This would result in annual charge of £500 to £600 per annum.”

“While the fees would not have been calculated as a percentage of the pension fund, if we assume an average pension pot of £300,000, then a £600 ongoing adviser charge would equate to 0.2 per cent of the initial pension pot, prior to the addition of any investment growth.”

In a report released this week the committee called for a ban on contingent charging.

The Pensions Regulator and the FCA were also blasted for their hand­ling of the “major misselling scandal” relating to the British Steel Pensions Scheme.

The other eight firms that have been asked to stop advising on pension transfers are: Vintage Investment Services, Retirement & Pension Planning Services, West Wales Financial Services, Pembrokeshire Mortgage Centre, Mansion Park, Bartholomew Hawkins, Inspirational Financial Management and County Capital Wealth Management.

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Comments

There are 14 comments at the moment, we would love to hear your opinion too.

  1. so we picking up the bill for fee paid to these advisers the pension providers and any penalty the fund advisers may charge a reported in the press Why are not these providers picking up the cost
    they accepted the business

    • It’s clients that pick up the bill, just pass on the cost and make sure they are aware – the FCA want transparency after all.

      The day politicians and regulators are forced to recognise that it’s innocent clients who are really paying they might look at it a little differently. As long as the focus is on advisers and they are seen to pay nothing will change.

  2. As just mentioned,we Mortgage and protection Advisers, will once again be paying a new interim Fee, I’ve said on here many times, this is unjust, immoral & legally cannot be right?

    • Sadly, neither morality and legality are the foundation stones of FS regulation in the UK.

    • Steve that’s collective punishment (financial or by force) for you, google it and see if it is legal (it certainly contravene’s the Geneva convention act)

      We are all (collectively) punished, financially in the case of the FSCS for the wrong doing of the few

      It just seems part and parcel now of our lives and certainly the lives of our clients as they are the ones that ultimately pay !!!

    • @Steve Burton

      If you are a firm with only mortgage and protection permissions, then you wont be contributing to the FSCS levy for investment and pensions failings.

  3. No problem, just send the FSCS bill to all the other advisers, as you always do! Why are we (i.e. our clients) required to pay for such inept regulation?

    Advisers have no say in any of this and we are being deluged by meaningless regulation from a regulator who doesn’t know how to deal with problems. Let’s go back to square one as the FCA isn’t working.

    This was heavily signalled some time ago, but nothing was done. I suggest that the transfers are all frozen whilst they are reviewed.

  4. his get rich quick scheme did not work but never mind we can pay for it all as usual as i have mentioned before we have a toothless regulator not fit for purpose lets see what happens next when the RBS report is released and they are seen to have covered up for there school chums

  5. Active Wealth was the first financial advice firm to enter the spotlight for working on British Steel transfer cases with introducer firm Celtic Wealth Management. It voluntarily suspended its pension advice permissions after a visit from the Financial Conduct Authority.
    The directors of the two firms, Darren Reynolds at Active Wealth and Clive Howells at Celtic Wealth, were invited to a Work and Pensions Committee hearing in parliament on 13 December, but both failed to show up.

    It later emerged that Active Wealth had been on the regulator’s radar since August 2016.

    Liquidator Tina Bullock was not available for comment at the time of publication.

    Darren Reynolds has been contacted by Professional Adviser for comment.He is missing in action

  6. does howells at celtic wealth also get probed by the FCA?or as an introducer gets away scot free.

  7. Once again, the morons we pay to run the FCA are found to be asleep at the wheel and those of us who know how to conduct an advice business and protect customers, even from themselves, have to pay the price, while the cowboys still operate.
    The fact that they will get found out eventually ought to give us satisfaction, not increased costs to our our own, properly run, businesses.

  8. This is a natural presumption that all the advice was wrong ! Before any complaints are received, its an invite to the ambulance chasers to put in claims on the presumption of Guilt, and of course FSCS will just accept that as its their starting point.
    What would they do if all advisers declined to pay ? – They take our licences, but the FCA will then have no one to blame and also no one to advice, also no one to pay their salaries.
    At this rate the financial advice service in this country with disintegrate and it lies at the door of the FCA and their incompetence

  9. Just in case the FCA, national press, MP’s and CMC’s are interested. I have just spent the last week researching and delving and putting together information for a client who is determined to take £90,000 out of his investments. He intends to re-invest in an Unregulated property investment that “guarantees” a 10%pa return for 5 years followed by a “guaranteed” 12%pa for 5 years after that. His existing investments have given him a return of 63% over 9 years and that is without full compounding due to withdrawals. Yet his greed cannot see what’s in front of him and how it will all end in tears.

    Having seen a lot of ill informed comments on the BBC yesterday, i just wanted to make it clear that some of us are honest decent guys. It does make you wonder why bother, it’s only the dishonest, bent crooks that seem to prosper whilst the rest of us are regulated out of existence.

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