Special Investigation

THe crooked financial adviser at the heart of one of the UK’s worst pension scandals moved his family home into a trust to avoid having to compensate his victims.

darren Reynolds, who pocketed more than £1 million by plundering the pensions of hundreds of British Steel workers, transferred ownership of the property twice in seven months without any money changing hands to put it beyond the reach of financial regulators investigating him.

The shameless father of one also took legal action to try to stop the damning details of the probe into his wrongdoing being made public, claiming last month that the stress of the scandal had caused the breakdown of his marriage and led to him moving out of the family home.

But when the Mail visited the smart suburban bungalow in the West Midlands town of Willenhall last week, his wife and neighbours said he was still living in the property. Our investigation also discovered that despite complaining to the regulators of ‘financial hardship’, Reynolds co-owns two other properties on the same street which are held in a separate family trust. Together, these are valued at more than £600,000.

Now lawyers who represented victims of the scam are demanding to know if he has squirrelled away any more of the cash he fleeced from hard-working steelworkers.

His behaviour is the final insult to workers after his self-serving ‘advice’ cost them millions and left their retirement dreams in tatters and a community devastated.

Reynolds duped them into moving their life savings from gold-plated retirement schemes into high-risk investments which secretly paid him huge commissions in a breach of financial regulations.

The smooth-talking salesman hid his wrongdoing by sending his clients official advice warning them against the move — but only after their savings had been transferred to the doomed new funds.

And when the authorities finally caught up with Reynolds, he allowed evidence to be destroyed and repeatedly lied and provided false information to investigators to try to evade justice.

The Financial Conduct Authority fined him £2.2 million in September and banned him from working in finance for life, warning he ‘poses a risk to consumers and the integrity of the financial system’.

The regulator said he ‘dishonestly’ advised more than 670 people — including 150 in the British Steel Pension Scheme — with 511 of them losing a total of £42.3 million.

AT LEAST 231 of the financial adviser’s customers lost more than the £50,000 compensation cap and were ‘significantly harmed’ by his scam, the FCA ruled.

The scandal began in 2017 with the sudden restructuring of the British Steel Pension Scheme — one of the UK’s largest defined benefits schemes, which guaranteed final- salary pensions to roughly 125,000 members.

Workers at the Port Talbot plant in South Wales had to choose quickly between leaving their savings in the old scheme, where they would likely be cut by 10 per cent; join a new, less generous scheme; or a third, far riskier option of taking their money out completely.

With only a few weeks to make such a major financial decision the workers — many of whom had worked at the company since leaving school — were in a ‘vulnerable and uncertain’ position, the FCA said. In the panic Reynolds pounced, spotting a ‘fertile source’ of new custom to ‘exploit’.

As a registered financial adviser with his own company, Active Wealth, steelworkers flocked to him for what they believed would be trusted advice.

UNDER FCA rules, to avoid a conflict of interest, financial advisers cannot take commission from pension or investment products they recommend. Instead, they charge a flat fee to clients. In most cases, often following a recommendation from a local introducer, Reynolds visited the British Steel workers at home and told them it was a ‘no brainer’ to transfer the cash to a ‘profitable and safe’ new scheme he knew of.

He told them they risked ‘ losing everything’ if they did not act quickly, and charged them £1,500 each for the advice.

In fact, their existing pensions, although likely to be slightly reduced, were a far better option for many people, guaranteeing a retirement income that rose every year in line with inflation and would also pay a reduced pension to their spouse if they died.

But Reynolds’ high- pressure tactics worked, and many signed the transfer forms during their first and only meeting with him.

One worker told the Mail how he had signed over a £700,000 pension pot built up over 40 years after an hour-long meeting with Reynolds at his home — of which only 20 minutes was spent discussing the actual pension with the rest spent on polite small talk.

Unbeknown to his clients, the fund they were moving their cash to was actually invested in highly illiquid unregulated assets in things such as renewable energy and holiday resorts, which are totally unsuitable for pension savings.

Also unbeknown to his clients, and in a blatant breach of FCA regulations, these new dodgy investments paid Reynolds a cut of up to 17 pc of the savings he had persuaded his clients to transfer into them.

Reynolds concealed these contraband commissions by paying himself via a complex network of firms involving second companies that were in the name of close family members but were entirely operated by him for his benefit.

One company, which was under the sole directorship of two of his family members, paid him £232,000.