Mis-sold Annuity
FCA fines Prudential £23,875,000 for failures relating to non-advised annuities sales
“Prudential failed to treat some of its customers, who could have secured a better deal on the open market, fairly. These are very serious breaches that caused harm to those customers. Prudential is now rightly focused [sic] on redress and today’s financial penalty reinforces the cardinal obligation of fairness that firms owe to customers.”
Mark Steward, Executive Director of Enforcement and Market Oversight, FCA
Between July 2008 and September 2017, Prudential's non-exhorted annuity business concentrated on selling annuities straightforwardly to existing Prudential benefits holders. Firms are required to disclose to clients that they may show signs of improvement rate in the event that they search around on the open market and Prudential knew that numerous clients could get a higher salary in retirement by looking on the open market.
Prudential neglected to guarantee that clients were reliably educated that they may improve bargain on the off chance that they looked and neglected to take sensible consideration to arrange and control its issues in rupture of its commitment to guarantee reasonable treatment of clients. Prudential additionally neglected to guarantee that documentation utilized by call handlers was fitting and neglected to screen calls with clients appropriately.
The company has willfully consented to direct a past business survey of non-prompted annuity deals so as to distinguish any clients who might be qualified for review because of the company's disappointments. Starting at 19 September 2019, Prudential has offered around £110 million in review to 17,240 clients (counting continuous annuity elevates).
It has just reached most by far of possibly influenced clients as a major aspect of its proceeding past business survey.
FCA fines Standard Life Assurance Limited £30 million for non-advised pension sales failures
"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."
-Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA
UK's Financial Conduct Authority said that Standard Life, some portion of Phoenix Group Holdings Plc, offered workers "huge monetary motivating forces to sell annuities, which urged them to put their own budgetary advantages in front of their clients." The organization neglected to screen the nature of calls between sales reps and customers to address manhandles.
The fine will be paid by Phoenix, which purchased Standard Life's annuity business a year ago, yet Phoenix will recover the cash from Standard Life Aberdeen.
Phoenix additionally has a £275m arrangement to subsidize pay for clients, of which £95m has just been paid out.
Susan McInnes, a chief at Phoenix, stated: "While this is a historic issue and one we were aware of when we acquired Standard Life Assurance Limited, we would like to apologise to affected customers, all of whom we have already been in contact with as part of the programme of customer redress."
