Wealth Manager - the site for professional investment managers

Register to get unlimited access to Citywire’s fund manager database. Registration is free and only takes a minute.

FCA fines Santander £12.4 million for five major advice failings

3 Comments
FCA fines Santander £12.4 million for five major advice failings

Santander UK has been fined £12.4 million for providing unsuitable advice.

The regulator uncovered serious failings in the way it offered financial advice from its bank.

In particular, there was a significant risk of Santander UK giving unsuitable advice to its customers, its approach to considering investors’ risk appetites was inadequate, and for some people, it failed to regularly check that investments continued to meet their needs - despite promising to do so.

The fine is one of the largest enforced on a UK retail bank for providing unsuitable advice.

The watchdog uncovered the failings through a mystery shopping probe and thematic review of the wealth management sector. 

When the FSA first put its concerns to Santander UK in late 2012, the firm immediately decided to stop giving financial advice in branches to prevent further problems occurring. In March 2013 Santander shut down the division, which contained 800 advisers.

The FCA’s investigation found that Santander UK had: 

* failed to make sure that its advisers were fully getting to grips with customers’ personal circumstances before making a recommendation, including understanding how much risk they were willing to take; 

* failed to ensure that customers investing were given clear and not misleading information about its products and services;

* for Premium Investments, failed to carry out regular ongoing checks to ensure the investment was still meeting customer needs;

* failed to make sure new advisers were properly trained before being allowed to give investment advice; and

* failed to properly monitor the quality of investment advice which meant that, where poor advice was given, it was not always picked up.

Santander UK agreed to settle at an early stage of the investigation so its fine was reduced by 30%, preventing it from having to pay a higher penalty of £17.68 million.

Tracey McDermott, director of enforcement and financial crime, said in a statement: 'Customers trusted Santander to help them manage 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.'

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: Yuan direction

Brewin's Gutteridge: Yuan direction

This week Brewin Dolphin's research head chats to Fidelity Asian Investment Directors Jenny Lee and Gary Monaghan about the big changes in China.

Play On the Road Challenge: horsing around on the polo pitch

On the Road Challenge: horsing around on the polo pitch

Libby Ashby takes to the polo pitch with Stuart Leigh-Davies from Redmayne-Bentley for an 'On the Road' challenge.

Brewin's Gutteridge: where Miton's Godber sees value

Brewin's Gutteridge: where Miton's Godber sees value

This week Brewin Dolphin's research head talks to George Godber, co-lead fund manager of the Miton UK Value Opportunities fund, about value investing.

Your Business: Cover Star Club

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Profile: what tempted Brewin's Glasgow team over to Rathbones?

Rathbones’ Glasgow office has only been open for three months but the team, led by Angus Kerr, has already attracted new clients

Wealth Manager on Twitter