AXA Wealth fined for advice ‘failings’

Wealth management firm AXA Wealth has been fined £1.8 million after a review by the Financial Conduct Authority (FCA) found that it failed to give suitable advice to its customers.

The wealth management firm was reviewed by the FCA, which found that AXA had failed to ensure accurate and suitable advice was given to customers.

The FCA said that AXA had failed to ensure a proper service was being offered to customers. Failings included not gathering enough customer information and not adequately informing customers exactly how much risk they would be taking. AXA were also accused of not ensuring that customers could cope financially if their investments fell through and failing to advise properly on product charges.

The FCA also found that there were insufficient controls on advisor bonuses that left the system open to manipulation by advisors, who could sell products based on their bonuses rather than the suitability of products for certain customers.

The fine specifically relates to the advice given to customers in branches in Clydesdale Bank, Yorkshire Bank and the West Bromwich Building Society from September 2010 to April 2012.

Tracey McDermott, the FCA’s director of enforcement and financial crime said, “AXA fell short of its responsibilities to its customers, many of whom were elderly, retired and financially inexperienced.

She added, “Its failures resulted in an unacceptable risk of AXA selling products which were unsuitable for its customers. AXA’s failures were avoidable, coming despite repeated warnings from the FCA’s predecessor to the industry about investment advice.”

A spokesperson from AXA UK said, “AXA UK has fully cooperated with the FCA and accepts the findings within its report.”

They added, “As the FCA has noted, customer detriment may currently be low as was the number of complaints AXA has received. We will be writing to our affected retail banking customers and will review the advice provided to them during that period should they wish us to do so.”

Further reading:

Banking regulator fines RBS £5.6m for inaccurate transaction reporting

Are pension funds serving their purpose?

How you pay for the City: episode one review

How you pay for the City: episode two review