Standard Life has been fined £30.8m by the Financial Conduct Authority (FCA) over failures in selling non-advised annuities.
The UK's financial watchdog said that Standard Life, part of Phoenix Group Holdings Plc, offered employees "large financial incentives to sell annuities, which encouraged them to place their own financial interests ahead of their customers." The company failed to monitor the quality of calls between sales people and clients to correct abuses.
During the period of misconduct, between July 2008 and May 2016, nearly 22% of call handlers received more than 100% of their basic salary in bonus payments.
Standard Life Assurance controls needed to place fairness to customers at their heart"
The regulator said SLA failed to provide some customers with appropriate information about enhanced annuities, including the option to shop around for a better deal.
"Standard Life Assurance controls needed to place fairness to customers at their heart," Mark Steward, the FCA's executive director of enforcement and market oversight, said Tuesday in a statement. "The financial incentives available to staff for selling non-advised annuities by telephone created conflicts which led to unfair outcomes for some customers."
SLA was formerly part of the Standard Life Aberdeen group of companies but was sold to Phoenix Group in August 2018. The past business review is ongoing under the ownership of the Phoenix Group and the firm expects to complete the review by the end of 2019.
In 2017, SLA 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 of the 31st of May 2019, SLA had paid approximately £25.3m to 15,302 customers.
An annuity is a retirement income product that can be bought with some, or all of a customer's pension pot. It pays a regular income either for life or for a set period.