The closest I came to meeting Darren Reynolds was at an evidence session of the parliamentary work and pensions committee in 2018.  Darren Reynolds was due to give evidence alongside me and two steelmen who had been helping organise their colleagues to get proper advice. Reynolds was due to speak alongside us but failed to show up. I note he only showed up remotely to the Tribunal hearing

By the time Frank Field has instigated the first BSPS inquiry,  it was clear that he was at the centre of an organised operation which has been documented on this blog several times. For those not aware

Reynolds’ agents were influencers within the works , paid to get steelworkers to sausage and chip suppers at local pubs- this was a form of “factory gating”

At the suppers , the steelworkers were scared into believing their pensions were going the way of Tata – going down. It was a classic conspiracy theory that led to the conclusion that transferring pension rights to a trusted adviser was the safest thing to do

There followed brief meeting that focussed on getting paperwork signed so that transfers could be paid by the British Steel trustees to self invested personal pensions that invested in funds which paid kickbacks to the adviser and made money for the retinue – at the steelworker’s expense.

This work was carried out on an industrial scale. Reynolds managed to get him and his firm to the top of the list of FCA recognised advisers in the Port Talbot area (even though he operated out of the Midlands). The FCA, MaPS and other IFA search engines effectively endorsed him.

Now the FCA is fining him, and not before time. As Al Rush says, he had no business being authorised in 2017. But Darren Reynolds was smart.

Darren Reynolds knew how to organise a scam and to do it within the regulatory perimetre. He abused his privileges as an FCA authorised adviser and brought the advisory profession into disrepute. He acted as an example to others and could rightly be considered the ring-leader.

How Reynold’s bad actions have led to good

But he was also the cause celebre that led to change in the way that pension transfers are conducted.

The practice of offering advice at minimal cost to coin it on the SIPP , a form of no scam no fee, is now banned. Known as “contingent charging, the practice can only be carried out in rare circumstances and only if the fee for advice is not subsidised by the fees that lead from that advice.

The public revulsion that followed the revelation of Reynolds and his associate’s activities, forced the FCA to look at their processes. Ultimately this led to the adoption of the Consumer Duty where advisers are required to put their customers first.

But proper redress is still a way away

A fine of over £2m, large as it is against a single bad actor, is not going to restore steelworkers to the pensions they gave up. The FCA has promised a restitution scheme and I hope that soon they will be able to rejoin an occupational scheme and get a scheme pension – if that is what they want from their retirement savings.

They are however – part of a formal redress scheme – designed to compensate them for the bad experience they have had. The calculation of the redress payment is typically showing no redress is due. This is down to gilt yields, marked to market liability valuations and other such nonsense that is no more comprehensible to steelworkers than the original choices in their “Time to Choose”.

The actors at the FCA and TPR who oversaw the RAA set up to protect members are now largely in new posts. Most famously the then CEO of the FCA is now Governor of the Bank of England. The hope from those I speak to in regulation is that the problem will be settled by the Redress Scheme the FCA has put in place.

But proper redress is still a long way away, as Al Rush’s post makes clear. Financial crime is rarely considered a matter for criminal justice, but it is theft, like stealing a car or robbing a house is theft. White collar criminals are still criminals.