The UK Financial Conduct Authority (FCA) today announced that it has taken action against Darren Reynolds and Andrew Deeney of Active Wealth (UK) Limited.

The FCA has decided to fine Mr Reynolds £2,212,316 and ban him from working in financial services. Mr Deeney was fined £397,400 and banned from working in financial services.

The FCA has found that Mr Reynolds had a clear disregard for customers’ interests in favour of his own personal gain. He dishonestly established, maintained and concealed a business model which incentivised recommending products which produced the highest commission for the adviser rather than the best outcome for the customer, and exploited this to the detriment of Active Wealth’s customers so that he could receive £1.01m in prohibited commission payments.

These payments were funnelled via companies connected to Mr Reynolds and were intentionally designed to disguise their true origins.

Mr Reynolds dishonestly advised more than 670 customers, including 150 British Steel Pension Scheme (BSPS) members who had no option but to make a decision about their pension, to put their money into investments that he knew were not suitable for them. Mr Reynolds dishonestly misled the FCA and recklessly allowed the destruction of evidence relevant to its investigation.

The FCA has also fined Mr Deeney £397,400 and banned him from working in financial services.

Mr Deeney made personal financial gains exceeding £200,000 by providing Active Wealth customers with unsuitable advice so that he could dishonestly receive banned commission payments. Mr Deeney’s misconduct then continued at Fortuna Wealth Management Limited (Fortuna), a firm he established which purchased Active Wealth’s goodwill and client database, where he repeatedly sought to mislead the FCA about his role in advising customers to invest in high-risk investments.

By June 2023, the Financial Services Compensation Scheme (FSCS) had paid compensation of over £19.8 million to 511 of Active Wealth’s former customers. At least 270 customers suffered losses over the FSCS’s compensation cap of £50,000. Were it not for this cap then the compensation amount would be over £42.3 million.

Mr Reynolds applied for privacy in relation to his Notice, but the Upper Tribunal refused that application on 20 September 2023. Mr Deeney settled his case with the FCA in May 2022.