Standard Life fined £2.45m for “misleading” marketing
Standard Life Assurance has been fined £2.45m by financial regulators for “misleading” marketing that led to customers losing money.
The Financial Services Authority (FSA) says 98,000 investors in its Pension Sterling Fund had been misled by marketing material for the fund that was not “clear” or fair”.
The City watchdog says investors were told that their money was in cash when it was in riskier “asset-backed” investments and then told last January that their investments had dropped suddenly by 5%.
Standard Life then moved to compensate investors at a cost of £103m after several complaints.
The FSA says Standard Life “failed to ensure that there were proper systems and controls over the fund, specifically in relation to the marketing material produced”, adding that this resulted in a risk “of unexpected capital losses being incurred for investors.
Margaret Cole, director of enforcement and financial crime at the FSA, says it takes”misleading” financial promotions “very seriously”.
“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,” she adds
The FSA says the fine could have been £3.5m but for Standard Life’s full cooperation and agreement to settle early, which meant the investment firm qualified for 30% reduction in penalty.
