Malcolm Sibthorpe, a steelworker, lost £50,000 from his pension due to bad advice from a pension advisor who profited £1m from illegal commissions. The advisor, Darren Reynolds, was fined £2.2m by the Financial Conduct Authority (FCA) for dishonestly advising 670 customers, including 150 steelworkers, deemed by the FCA as one of the worst cases. The steelworkers, many from Wales, all moved £2.8bn from their pension plan when it was restructured in 2017, into private schemes. Mr Sibthorpe said Reynolds “just ripped everyone off”, recalling he was told he would lose 10% if he went with the government scheme and they wouldn’t be able to get his money out.
The FCA investigation showed how Reynolds tried to hide his commissions by filtering them through shell companies. On top of being fined £2.2m, Reynolds is now banned from giving financial advice and one of his advisors at his now-dissolved firm, Active Wealth UK, was also banned from the sector. Andrew Deeney was fined £397,000 for taking £200,000 in illegal commission payments.
Mr Sibthorpe said numerous steelworkers were being approached about moving their pension pots into private schemes and the advisor, Reynolds, had the “gift of the gab” when he came to meet him and his wife, saying he did pensions for the police and Post Office. Mr Sibthorpe got his pension pot back at the end of December, but it was £50,000 smaller due to transfer fees, and for the rest of his life, the payments will fluctuate with the market.
Under the Financial Services Compensation Scheme (FSCS), £19.8m was paid to 511 of Active Wealth’s former customers, less than half of what they had lost, due to a £50,000 cap on payments from the scheme. Despite Mr Sibthorpe thinking Reynolds should go to jail, a criminal investigation by South Wales Police ended with no further action being taken
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