The UK’s Financial Conduct Authority (FCA) said on Tuesday it fined Standard Life Assurance Limited (SLAL) £30.7 million “for failures related to non-advised sales of annuities.”
The FCA said Standard Life Assurance Limited was formerly part of the Standard Life Aberdeen group of companies but it was sold by Standard Life Aberdeen to the Phoenix Group of companies on August 31, 2018.
The FCA said Standard Life Assurance Limited did not dispute the FCA’s findings.
The firm’s agreement to accept the FCA’s findings meant it qualified for a 30% discount.
Otherwise, the FCA would have imposed a financial penalty of £43.9 million.
The FCA said: “SLAL failed to put in place adequate controls to monitor the quality of the calls between its call handlers and non-advised customers.
“At the same time, SLAL offered its front-line staff large financial incentives to sell annuities, which encouraged them to place their own financial interests ahead of their customers.
“This gave rise to a significant risk that SLAL’s call handlers would fail to provide customers with the information they needed to choose an annuity appropriate to their circumstances.”
Mark Steward, executive director of enforcement and market oversight at the FCA, said: “Standard Life Assurance Limited’s controls needed to place fairness to customers at their heart.
“Here, the financial incentives available to staff for selling non-advised annuities by telephone created conflicts which led to unfair outcomes for some customers.
“Firms must have controls in place to ensure they are prioritising fairness to customers.”
The FCA added: “On 31 January 2017, SLAL voluntarily agreed to conduct a past business review to identify and pay redress to those customers who were likely to have suffered, or did suffer, loss as a result of its failures.
“As at 31 May 2019, SLAL had paid approximately £25.3 million to 15,302 customers.”