Steelworkers who transferred out of the British Steel Pension Scheme (BSPS) via collapsed IFA Active Wealth are taking legal action.
Active Wealth hit the headlines in November last year. It became the first firm to cease pension transfer business following intervention by the Financial Conduct Authority (FCA) over advice given in relation to the BSPS. Active Wealth then entered the public spotlight when it was called to give evidence to MPs.
Its clients predominantly found their pension funds invested through the online platform Vega Algorithms into funds run by Newscape Capital, called 5alpha Conservative and 5alpha Adventurous. This investment went through discretionary fund manager Gallium Fund Solutions. These investments also carried a 5% charge for leaving.
Now, a large group of steelworkers has launched legal action in a bid to reclaim their pension pots.
Philippa Hann, partner at law firm Clarke Willmott, is representing the steelworkers.
She told New Model Adviser®: 'I’ve been instructed by a number of the steelworkers who were advised by Active Wealth to advise them in relation to proceedings against various parties.
'We are very much in an investigatory stage at the moment. But it is clear they have been poorly treated, and where there has been negligence, breaches of contract or breaches of statutory duty, we will be advising the clients accordingly and we anticipate being instructed to pursue those.
'We have offered them a nominal fee to assist with their claims going to the FSCS and we have offered them a no-win, no-fee in relation to claims relating to other potential defendants.
'At the moment, we are investigating all entities involved in the chain, which has resulted in them investing in the Newscape fund.'
Al Rush, principal of Rutland-based Echelon Wealthcare, established a forum through which affected steelworkers could co-ordinate their efforts, and has offered pro bono work to a number of former Active Wealth clients.
He said: 'This has been such a long slog, and although it’s not the end just yet, at least it’s the beginning of the end.
'I have received numerous threats of litigation as a result of my involvement. But I remain unswerving in continuing to help these men and their families to the absolute maximum of my ability, and to discover just how this distribution process has evolved and who was involved.
'However painful it is to me, my troubles still pale into insignificance compared to the threat to retirements these men and their families have had to endure.'
Clarke Willmott has previously run group actions against Equitable Life, UBS and Barclays, along with the Cameron Farley (dissolved) Ponzi scheme, where the claimants had lost over £45 million.
It has also acted against the Eclipse Film Scheme, in respect of which HM Revenue & Customs recently confirmed its intention to charge the investors income tax on income they have never and will never receive.
New Model Adviser® has contacted Active Wealth for comment.