A former adviser at collapsed IFA Active Wealth has defended letters encouraging clients to claim against the firm via solicitors charging 30% of Financial Services Compensation Scheme (FSCS) payouts.
Andrew Deeney, who previously held a CF30 adviser function with Active Wealth, now runs Fidelis Wealth Management and recently bought the client bank of his controversial former firm, which found itself at the heart of the British Steel Pension Scheme (BSPS) saga.
Deeney has written to clients who have moved across from Active Wealth, alluding to 'negative publicity' around the firm and suggesting that they are 'likely to be entitled to compensation'.
The letter directs clients towards Newcastle-based TLW Solicitors in order to make a 'no win no fee' claim.
It adds: 'It is our understanding from speaking to TLW Solicitors that even though Active Wealth (UK) Ltd are no longer trading, they are likely to still be able to obtain compensation for any losses.'
Deeney told New Model Adviser® that the decision was made to write to clients after Fidelis had been 'fielding calls from concerned clients' who had been contacted by claims management firms.
He said: 'Following conversations with clients we decided to investigate an independent alternative and ultimately chose the services of a solicitor firm rather than a "claims management firm" that specialises in pension mis-selliing reviews, so clients concerned about the advice they had received would have a viable, trustworthy and independent alternative.'
Deeney denies that there was any financial arrangement between Fidelis and TLW Solicitors, adding: 'The entire idea behind this was for an independent assessment that would help to bring closure for the clients and myself personally. There is no connection between the two companies and Fidelis Wealth Management will not receive any fees for the introduction.'
One adviser's mystery shop of TLW Solicitors revealed charges of up to 30% of Financial Services Compensation Scheme (FSCS) redress payouts, meaning a maximum £50,000 payout would cost the client £15,000 in solicitors fees.
Deeney said: 'Fidelis Wealth Management have no control over the fees charged by TLW. Their fees are fully disclosed to clients prior to any work commencing and the client can make their own judgment on whether this is fair or not.
'Clients are free to do their own research and can in fact deal directly with the FSCS if they wish to at no charge.'
Alistair McDonald, head of marketing and business development at TLW Solicitors, said: ‘As yet we have not been instructed by any former clients of Active Wealth. If we are, then we would need to look at what, if any, potential claim or claims they may have and judge each one on an individual basis.’
New Model Adviser® revealed that Deeney had conducted meetings and signed paperwork as a representative of Active Wealth through the process of a steelworker investing his life savings in unregulated property bonds.
Other steelworkers have described dealing with Deeney throughout the process of transferring their pension out of BSPS, only for the recommendations to be signed off by Active Wealth director Darren Reynolds.
Deeney said all clients of Active Wealth had been made fully aware that he worked as a self-employed consultant within the firm, and that this had never been a 'secret'.
A further statement from Fidelis said: 'Andrew’s role was to act in a supporting capacity to Darren Reynolds and this involved seeing clients and carrying out administration work.
'Business processes, pension and investment providers were all chosen by Active Wealth and Andrew followed those processes as directed. The fact Andrew visited existing and prospective clients and also signed letters requesting information does not detract from the fact that product advice was ultimately given by Active Wealth. I believe this practise is typical of many IFA and restrictive firms.'