The Financial Conduct Authority (FCA) has fined Santander UK £12.4 million for investment advice failings.
The regulator fined Santander £12.4 after it uncovered 'serious failings' within the bank's advice procedure and said that its approach to considering investors' risk appetites was 'inadequate'.
The FCA added the bank had failed to regularly check that investments continued to meet some customers' needs, despite promising to do so.
Tracey McDermott, the FCA's director of enforcement and financial crime, said customers trusted Santander to help them manager their money wisely but it failed to live up to that responsibility.
'If trust in financial services is going to be restored, which it must be, then customers need to be confident that those advising them understand, and are driven by, what they need. Santander let its customers down badly.'
Customers that held Santander’s Premium Investment product, which were promoted as offering a tailored service including to reallocate investments and re-balance portfolios, are eligible for redress if they paid for a service they did not receive.
The fine follows a mystery shopping exercise undertaken by the Financial Services Authority (FSA) in 2012, looking in to advice given in the bank’s branches.
Between March and September the FSA visited over 200 branches from each of the major high street banks.
It found that advisers were giving unsuitable advice in 11% of cases and in 15% of cases failed to collect enough evidence to support the suitability of their recommendations.
In March 2013 Santander shut down its UK investment advice division, which contained 800 advisers, as a result of the regulator's mystery shopping results in December 2012, said Santander.
Santander head of UK banking, Steve Pateman said that the bank regrets that elements of Santander's 'historic' branch-based investment sales processes did not meet the required regulatory standards and apologised to any customers who have concerns.
'We expect customer detriment to be low given the performance of the underlying investments and, as the FCA acknowledges, Santander has seen very few complaints from customers.
'Nevertheless, to ensure that any concerns our customers may have are addressed we will be writing to them this Summer, to offer them an opportunity to withdraw from their investment or have their sale reviewed. Customers need take no action now and should wait to receive letters from us.'