Trust is vitally important when it comes to money matters; it’s crucial to know that you can rely on your financial advisor to look out for you and give you honest, clear advice.
Active Wealth (UK) Ltd was an independent financial advisor, incorporated on July 28, 2014, and dissolved on May 14, 2019. It was declared in default by the Financial Services Compensation Scheme (FSCS) in March of the same year due to its inability to pay claims against it. The FSCS has compensated many former
clients of the firm, who were predominantly former British Steel Pension Scheme (BSPS) members, totalling £19.8m (as of June 2023).
Downfall of Active Wealth (UK) Ltd
In November 2017, following FCA intervention, its Defined Benefit transfer permissions were suspended.
Active Wealth faced liquidation in February 2018 and lost its authorisation in May 2019. It was heavily involved with the British Steel Pension Scheme saga, having incorrectly advised British Steel workers to shift their pensions into Self-Invested Personal Pensions (SIPPs) holding high-risk investments. Many of these investments were not suitable for the clients. These investments included The Resort Group, a luxury holiday resort investment in Cape Verde, and Portfolio Six, a diversified portfolio of investments into various non-liquid assets.
Inappropriate Advice and Mismanagement
The Resort Group, founded in 2007, was a heavily marketed but ultimately unsuitable option for many investors, with its luxury hotel developments and advertised high fixed returns based on rental income. Likewise, Portfolio Six contained a mix of mini-bonds in diverse sectors such as real estate, car parks, and renewable energy, which didn’t align with the investors' risk-profiles and needs.
The Director of Active Wealth, along with the Director of its unregulated introducer, Celtic Wealth, (previously an authorised advisor at Active Wealth) were instrumental in the mismanagement of clients’ funds. The director of Active Wealth advised clients to transfer nearly £24 million to SIPPs which were invested in inappropriate portfolios.
Subsequently, he faced a fine of £2.2 million by the Financial Conduct Authority (FCA) for providing unsuitable advice to clients regarding 670 pension transfers. Fines of £397,400 were given and the director was banned from working in financial services. The director of Celtic Wealth later acquired Active Wealth (UK)’s client bank through their new firm: Fortuna Wealth Management. We expect FCA intervention may follow into this transaction.
How CP Financial Claims Can Assist
CP Financial Claims stands as a beacon of hope for those affected by the mis-sold claims surrounding Active Wealth (UK) Ltd. We offer comprehensive support and guidance to help you navigate through the claims process. Our dedicated team of experts is well-versed in dealing with mis-sold claims and works diligently to secure the compensation you deserve.
Compensation and Regulatory Interventions
The FSCS aims to compensate for the value of retirement savings lost as a result of mis-selling by firms like Active Wealth. According to industry press, by April 2021, over £12.5m had been paid out to address the 542 claims received against Active Wealth. Without the £85,000 cap on FSCS compensation, compensation payouts would have totalled a staggering £42.3m.
The mismanagement and improper advice led to significant losses for the clients, with industry professionals revealing that by November 2020, 13 firms known to have advised steelworkers to transfer out the BSPS had gone into liquidation.
Several other firms connected to the BSPS failures have also failed, increasing the scope and impact of the misadvised pension transfers.
The Role of CP Financial Claims
Our mission at CP Financial Claims is to offer an uncomplicated and smooth claims process for those who have suffered due to the inappropriate advice and actions of Active Wealth (UK) Ltd. We strive to ensure you are compensated fairly and swiftly, mitigating the stresses associated with financial loss and recovery.
Transparent Fee Structures and Investments
The FCA highlighted the lack of transparency in Active Wealth's fee structure and the commissions, ranging from 7% to 17% of clients invested, which were undisclosed and contrary to the clients' best interests. At CP Financial Claims, we prioritise clear, upfront communication about our processes and fee structures, ensuring our clients feel informed and comfortable throughout their claims journey.
If you’ve been affected by the unsuitable advice of Active Wealth or similar firms, don’t hesitate to enter your details below for a free, no-obligation chat with our team.