The Financial Services Authority has fined Royal London £400,000 and ordered the life group to pay £...
The Financial Services Authority has fined Royal London £400,000 and ordered the life group to pay £15m in compensation after noting a series of breaches in the firm's selling of investment products.
The Personal Investment Authority found the life group was unable to maintain a system of compliance control as well as failing to monitor the operations of its sales staff.
PIA investigations found that, in relation to selling practices, Royal London had failed to consider the needs of the customer and how the investment product met those needs. It also failed to record why a product was recommended, and complaint procedures were slow and inadequate.
FSA spokeswoman Louise Buckley said some complaint procedures could take up to six weeks to resolve with other customers left waiting indefinitely for a response. Buckley added: "In some instances a manager would ask an adviser to investigate a complaint and then just take the adviser's word that it was okay without checking the facts."
Following the authority's inspection in January 1999 the firm voluntarily suspended its sales force in order to retrain them and commence a review of past sales and products during a three year period ending in February that year.
The review includes endowments, life policies and savings plans and Royal London has started compensation payments. A helpline, 0845 601 5384, has been set up forcustomers concerned about their investments.
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