Arren Reynolds, boss of Active Wealth, the financial advisory firm famous for involvement in the British Steel pension transfer debacle, has been banned from serving as a director for 13 years after losing Â£ 24million of customers.
Reynolds, 51, has advised hundreds of clients on how best to invest their pension funds and, following his advice, 288 have transferred more than Â£ 23million into self-invested personal pension plans.
Their money was then placed in a portfolio of high-risk, unregulated corporate bonds with no protection for investors from the Financial Services Compensation Scheme.
In this case, the FSCS rewarded them with more than 10 million pounds, but due to the compensation cap of 50,000 pounds, they still lost more than 24 million pounds.
The Insolvency Department investigated the company, which went into liquidation in 2018, and said in a statement today: Customers of the company.
Rob Clarke, Chief Insolvency Investigator, said: “Thirteen is a significant ban and removing Darren Reynolds from the corporate arena will protect other investors from further harm for a long time.”
“It is a very sad situation for those victims who believed that Reynolds and his company were providing professional investment advice in their best interests, but instead placing their future financial stability in high risk and inappropriate investments.”
The ban was ordered by the Manchester High Court of Justice by DJ Obodai, which means that he cannot directly or indirectly become involved in the “promotion, training or management of a business” without permission. court.
Active Wealth was the first company to be banned from making pension transfers by the Financial Conduct Authority prior to its liquidation. Several of his clients were members of the British Steel Pension Scheme and were persuaded to invest in the so-called Portfolio Six selection of high risk bonds.
Al Rush, an IFA who is now helping British Steel pensioners recover their finances, said: âDarren Reynolds has ruined the lives of steelworkers.
âHe valued hard-working men and women from their gold-plated defined benefit pensions. A 13-year suspension. A 13-year suspension as a business manager won’t make the slightest difference for a man who has trampled on the responsibilities of being one with voluntary abandonment.
“It is now up to the regulator to decide what legal proceedings can now be brought against this man, and I hope he can be prosecuted and not allowed to profit from his activities.”
Portfolio Six’s investments were to be sold only to experienced or knowledgeable investors, but in at least eight inquiries, the investigation found that Reynolds had made inaccurate statements in describing the investment experience and appetite for the financial risk of its clients.
Reynolds had claimed that Active Wealth had relied on Portfolio Six’s fund manager to perform such due diligence, but the investigation indicated that he should have known that this would not be impartial or independent because the director of the fund was associated with portfolio companies.
Reynolds denied wrongdoing against British Steelworkers to members of the Select Committee on Work and Pensions and claimed he was not prompted by commission payments to recommend the transfer of workers out of company plans.