Wealth Manager - the site for professional investment managers

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

RBS fined £14.5m for mortgage advice failings

RBS fined £14.5m for mortgage advice failings

The Financial Conduct Authority has fined the Royal Bank of Scotland and NatWest £14.5 million for advice failings around mortgage sales.

Two separate reviews by the regulator found that in more than half of the cases sampled, the suitability of the advice was not clear from the file or recording. The advice failings in the sales process included adequate affordability assessments, not properly advising customers on consolidating debt and not providing adequate guidance to customers on which mortgage term was best for them.

Only two of the 164 sales reviewed overall were considered to fully meet requirements. In the banks' own mystery shopping tests, in three instances advisers were found to have given views on the future movements of interest rates.

The regulator said that the banks failed to rectify the problem after earlier findings by its predecessor, the Financial Services Authority.

Tracey McDermott (pictured), director of enforcement and financial crime at the FCA, said: 'Taking out a mortgage is one of the most important financial decisions we can make. Poor advice could cost someone their home so it’s vital that the advice process is fit for purpose. Both firms failed to ensure that their customers were getting the best advice for them.

'We made our concerns clear to the firms in November 2011 but it was almost a year later before the firms started to take proper steps to put things right.  Where we raise concerns with firms we expect them to take effective action to resolve them without delay. This simply failed to happen in this case.'

The FCA added that there is so evidence of significant consumer detriment and noted that the banks agreed to settle early and receive a 30% discount on what would have been a £20.7 million fine.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Brewin's Gutteridge & Foster talk property with Standard Life's Baggaley

Gutteridge and Foster discuss UK commercial property with Jason Baggaley, manager of the Standard Life Property Income investment trust

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Brewin's Gutteridge asks Odey's Tim Bond two tough questions

Gutteridge puts the heat on Odey's asset allocation maestro with a couple of tough questions.

Brewin's Foster & Gutteridge: searching for the yield of dreams

Brewin's Foster & Gutteridge: searching for the yield of dreams

Guy Foster and Ben Gutteridge discuss the latest upbeat US payroll report and how it has increased the probability of a first hike in interest rates in June.

Your Business: Cover Star Club

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Profile: Creechurch Capital’s CEO on going the extra mile in a crowded market

Growing a business is the main aim of many company owners but managing that growth in a controlled way is just as important

Wealth Manager on Twitter