Santander fined £12m for poor financial advice

26 March 2014

Santander UK has been fined more than £12 million by the Financial Conduct Authority (FCA) for "serious failings in the way it offered financial advice".

The regulator said it had given unsuitable advice to customers, failed to properly consider investors' risk appetites and didn't regularly check that investments met their needs.

The Financial Services Authority (the FCA's predecessor) first contacted the bank about its concerns in late 2012 following the results of a mystery shopping exercise and wealth management review.

Announcing the fine today, the FCA said Santander's failings took place despite "repeated communications and warnings about suitability of advice to the industry".

Fortunately for some affected customers, the FCA said it expects losses to be minimal because the stockmarket has performed well since many investments were first made.

However, it added customers who had a Premium Investment, which was meant to tailor customers' portfolios to "reallocate investments and rebalance portfolios", may be entitled to compensation if they "paid for a service they did not receive".

Let down badly

Tracey McDermott, director of enforcement and financial crime at the FCA, said: "Customers trusted Santander to help them manage their money wisely, but it failed to live up to that responsibility. If trust in financial services is going to be restored, which it must be, then customers need to be confident that those advising them understand, and are driven by, what they need. Santander let its customers down badly."

Santander's head of UK banking, Steve Pateman, said: "We regret that elements of Santander UK's historic branch-based investment sales processes did not meet the required regulatory standards and apologise to any customers who have concerns. We expect customer detriment to be low given the performance of the underlying investments and, as the FCA acknowledges, Santander has seen very few complaints from customers.

"Nevertheless, to ensure that any concerns our customers may have are addressed we will be writing to them this summer, to offer them an opportunity to withdraw from their investment or have their sale reviewed. Customers need take no action now and should wait to receive letters from us."

In the meantime, customers who think may have been affected can find more information at

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