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Santander referred to enforcement after FSA mystery shop

by Michelle Abrego on Feb 13, 2013 at 10:23

Santander referred to enforcement after FSA mystery shop

Santander has been referred to enforcement following a Financial Services Authority (FSA) mystery shopping exercise into the quality of advice given by the bank.

The regulator is understood to be taking enforcement action against the bank after it published the findings of a review into the investment advice given by six of the UK banks and building societies.

The review found that in 11% of mystery shops the advisers gave the customer unsuitable advice and in 15% of mystery shops the adviser did not gather enough information to give suitable advice.

A spokesman from Santander said he could not comment on any FSA enforcement but said the bank was considering the impact of these findings on its operations.

'Whilst Santander is disappointed with the findings of the FSA’s mystery shop, we have considered the findings in the context of the significant actions we took in 2012 to prepare for the post retail distribution review world,’ he said.

'We continue to believe it is important to offer customers access to a broad range of financial products which are suitable to their needs and individual situations, and we are working towards that objective.'

In December 2012 Santander pulled 800 advisers from giving investment advice with immediate effect and revealed it was not ready to meet the retail distribution review deadline.

The bank said it was putting its investment advisers through ‘intensive bespoke training programme’ but did not outline a date for their return.

This was a U-turn from its  announcements in September 2012 when Santander announced plans to launch a restricted advice service for customers with more than £25,000 by the end of 2012.

12 comments so far. Why not have your say?

Hickky

Feb 13, 2013 at 10:42

Ok I was correct in my assumptions, but what about the sales force? Perhaps we will wait for a press release later on to update, after the salesmen affected get notified.

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Jonathan Kirby

Feb 13, 2013 at 11:56

The sad thing is that RDR will simply push all these organisations to non-advised, commission paying sales with no comeback and IFAs will find it impractical to deal with the middle market because of the regulatory burden.

Well done FSA.

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Barman

Feb 13, 2013 at 12:20

Jonathan - the sad thing is actually poor advice, poor controls, poor governance, poor culture, poor products and greed will force these organisations to non-advised sales. They obviously cant advise properly.

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banks mad

Feb 13, 2013 at 12:36

no surprise Simon Rouse head of advise and ex FSA resigns the night before the report is issued and all advisers put on notice. another poor operation closed.

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Steve99

Feb 13, 2013 at 14:58

It will be the honest advisers simply trying to work good advice and provide good service from limited products and restrictive processes coupled with the threat of sales targets not being reached that will suffer the most.

No level of additional training can resolve these issues.

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PAUL WOOLLEY

Feb 13, 2013 at 16:13

Let's be real here, all the banks targeted sales forces in such a way that made it certain miss-selling was sure to take place and guess what ? It did.

Now why is anyone surprised about this ?

Pffft.

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John Burchett

Feb 13, 2013 at 17:06

Santander (Abbey) is disappointed at the FSA's findings. I wonder which way they meant that?

In the main Banks do not recruit the calibre of staff that have the necessary qualities to advise no matter how much training they receive. It is no surprise that they continue to do what they have always done. Look for profit, acheive targets and bonuses and care nothing for the client or the implications of their actions.

One thing they seem to be trained well at is sleeping at night!

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Bobby 21

Feb 13, 2013 at 19:30

What to you get expect from bonus hungry ex mobile phone and double glazing salesman ??

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Richard Hardy

Feb 14, 2013 at 09:49

It's a shame the FSA only take notice of mystery shoppers and not years of complaints by the members of the public before they 'spring' into action.

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Hickky

Feb 14, 2013 at 10:50

I have just been reading in the paper about a bureaucratic agency, tasked to ensure public confidence and safety in its field, that has done nothing to protect public safety and failed to prevent widespread fraud in the industry. It had its budget increased by nearly 20% this year, but refuses to accept responsability. Its name, the FSA! Alas this one is tasked to maintain food standards, with many people shouting at it to do something about standards that mean anything, they made themselves hoarse.

So all this shows is if you let an agency be chaired by a Lord who is a career labour politician who went from uni straight into politics, aided by a career committee man (who has at least worked in his industry), it is fairly certain the agency will produce regulations galore but totally miss the point of its mission.

Sounds familiar?

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Barman

Feb 14, 2013 at 11:01

@ Hickky - You realise this article is about Santander right?

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Hickky

Feb 14, 2013 at 11:20

@ Barman

Whose fault is it that the level of misleading behaviour shown by Santander and other banks covered by yesterdays FSA report was allowed to go unchecked for so long?

Rather like Findus, the banks turned a blind eye to the problems, not taking enough interest in the welfare of their customers, and allowing misrepresentation to go on unchecked. The regulator is tasked to root out these behaviours, but for a long time it did inspections on paperwork and ensuring the correct procedures and boxes were ticked. They only did these mistery shopper excercises last year.

Santander is guilty of shocking behaviours, yes, but if a regulator does its job properly, it will root out and act on reported failure.

But the bank will change b ehaviours; from Shabby National to Scamtander perhaps?

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