By Elliot Wright, 20th January 2010
The Financial Services Authority has dished out a hefty £2.45m
fine to Standard Life Assurance Limited (SLAL) for misleading
thousands of customers.
Almost 100,000 customers who invested in SLAL's Pension Sterling
Fund were misled by marketing material which failed to warn them
about underlying investment risks.
The FSA concluded that the marketing material was not 'clear,
fair and not misleading' and that customers were therefore misled
as to the true nature of the investment.
This resulted in customers who had invested in the fund
potentially making unexpected capital losses. As the fund was
intended for the investment of pensions, the FSA found it
unacceptable that individuals approaching retirement were
unknowingly exposed to such a risk.
The FSA also found that there had been a lack of a prompt and
full investigation of concerns that had arisen about the misleading
marketing material.
The FSA concluded that the marketing
material was not 'clear, fair and not misleading'
The fine signals the FSA's intentions of cracking down on
financial firms that fail to protect their customers.
Margaret Cole, FSA director of enforcement and financial crime,
said: "The FSA takes the issue of misleading financial promotions
very seriously and the fine announced today demonstrates our
commitment to the principle of credible deterrence.
"It is critical that consumers are given an accurate
understanding of the nature of investment products and the risks
involved. Without this information, consumers are unable to
make informed decisions about whether investments are suitable for
their individual investment strategy.
"Throughout 2010 and beyond, the FSA will continue to take
strong action when a firm's financial promotions fall short of the
requirement to be 'clear, fair and not misleading' and customers
have not been treated fairly."
In response to the FSA's actions, Standard Life is identifying
customers who were subject to the misleading marketing material and
paying compensation where appropriate.
Useful links:
How to
get compensation for mis sold investments
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