Despite Active Wealth advising on the transfer of British Steel pensions worth millions, just over £100,000 has been awarded in compensation to scheme members. This makes up just a fifth of total payouts from the now defunct firm.
British Steel Pension Scheme
Many BSPS members were convinced to transfer into pension schemes unsuitable for them. More than 2,500 pensions were transferred out of the scheme instead of moving to the BSPS2 replacement scheme.
Due to limited investment knowledge, the steelworkers were left financially vulnerable. Independent Financial Advisors such as Active Wealth took advantage of this to persuade them to move into high risk, unregulated schemes.
As a result, firms such as Active Wealth sold unsuitable schemes to BSPS members.
Active Wealth
Active Wealth entered liquidation in February 2018. This was a result of the Financial Conduct Authority (FCA) forcing the firm to cease all pension transfer activity.
It was confirmed last month that the Financial Services Compensation Scheme (FSCS) is in the process of paying out over £500,000 for complaints made against the IFA. However, just £138,000 of this amount has been given to BSPS members.
Those with a pension pot worth more than £30,000 were obliged to seek financial advice before investing. On the advice of the firm, at least 64 steelworkers proceeded to transfer out of the scheme into alternative pension arrangements.
This left pension pots with a minimum value of £1.9m in the hands of Active Wealth. Only £138,000 has been paid out in compensation so far.
FSCS payouts
Due to the huge volume of mis-selling cases, the FSCS is still processing claims made by steelworkers. However, steelworkers are unhappy with the method of calculating compensation.
The FSCS is calculating compensation based on the value of the pension when it was transferred. Steelworkers would have been better off if they had not been convinced to transfer by Active Wealth and instead joined BSPS2.
As a result, some of the steelworkers’ pensions are now worth less than they should be. One was valued at some £25,000 less.
If you were advised to invest your pension pot by Active Wealth, get in touch today to find out if you have been mis-sold a financial product. Our team of expert financial mis-selling solicitors can offer advice and resources on a no win, no fee basis.