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In 2019, the UK’s Financial Conduct Authority (FCA) fined Standard Life £30m for mis-selling annuities to customers over the phone. The FCA concluded that the company failed to adequately inform customers with the information they needed to choose an annuity appropriate to their circumstances. Annuities are a pension product that provide a fixed income in retirement.
Under FCA rules, annuity providers are required to tell customers that they could get a better deal elsewhere if they shop around. The FCA found that Standard Life failed to provide customers with appropriate information about the products, leading to unsuitable sales.
In certain cases, Standard Life sales staff were paid more than 100 per cent of their salaries in bonuses. The FCA concluded that Standard Life failed to adequately manage the risks associated with sales incentives, which generated conflicts of interest that led to unfair outcomes for customers. Standard life set aside £275m for redress to customers. As of May 2019, the firm had paid out approximately £25.4m to 15,302 customers.