Chartered Financial Planner Darren Antony Reynolds has been banned from being a director for 13 years for pension transfer failings which resulted in clients losing £24m from their pensions.

The adviser, 51, of Willenhall, West Midlands, was the sole director of Active Wealth (UK) Limited, an independent financial adviser.

A qualified Chartered Financial Planner, he advised hundreds of clients on how to invest their pension funds from December 2014 to the company’s liquidation in February 2018.

Due to his advice, at least 288 clients transferred more than £23m from their existing pensions to Self-Invested Personal Pension Schemes (SIPPs). The transferred cash was then invested in a portfolio of corporate bonds called Portfolio Six.

Despite the name suggesting relatively low risk, these were actually high risk investments and were described as ‘relatively illiquid’ and ‘unregulated’. They were specifically excluded from the protection offered by the Financial Services Compensation Scheme (FSCS) when investments were made directly.

Active Wealth was believed to be one of a number of companies involved in the British Steel Pension Scheme transfer debacle which saw large numbers of mineworkers lose money when their pensions were transferred.

The Insolvency Service, which took Mr Reynolds to court, said the bonds were only available for direct investment to experienced high net worth or sophisticated investors or those who had received independent advice who declared they had the experience and knowledge to understand the risks.

Following Active Wealth’s liquidation, an Insolvency Service investigation found that between December 2014 and December 2016, Mr Reynolds had “failed to act in the best interests of the company’s clients.”

Mr Reynolds told the Insolvency Service that Active Wealth relied on due diligence undertaken by the fund manager of Portfolio Six. However, he knew or ought to have known that this was not impartial nor independent as its directors were associated with companies within Portfolio Six.

The investigation found that in at least eight applications, Mr Reynolds made inaccurate declarations when describing his clients’ investment experience and appetite for financial risk.

At liquidation, Active Wealth’s clients had claimed more than £10m in compensation from the FSCS as a result of the bad advice. However, as individual claims were capped at £50,000, the actual loss suffered by Active Wealth’s clients is more than £24m.

On 25 May, in the Manchester High Court of Justice, Judge Obodai disqualified Darren Reynolds as a company director for 13 years. 

Rob Clarke, chief investigator at the Insolvency Service, said: “This is a very sad situation for these victims who believed Darren Reynolds and his company was providing professional investment advice in their best interests but instead placed their future financial security in high risk and unsuitable investments. 13 years is a significant ban and removing Darren Reynolds from the corporate arena will protect other investors from further harm for a lengthy period of time.”