Standard Life fined £2.45m

| January 20, 2010 | 0 Comments

The Financial Services Authority (FSA) has fined Standard Life for publishing misleading marketing literature about one of its funds.

The FSA fined the Edinburgh insurer £2.45 million after the financial watchdog said it had misled 98,000 individual investors in its Pension Sterling Fund.

The literature, which was published between July 2006 and February 2009, advertised the fund as providing a stable investment in turbulent environment.

The FSA said: “It was also targeted at customers approaching retirement who were looking to protect a tax-free lump sum.”

Investors were told their money was in cash when it was actually in much riskier “asset-backed” investments.

A year ago, investors were informed that their fund had fallen by 5% - an average of £900 each.

Standard Life did compensate investors after a number of complaints from financial advisers - this cost the insurer more than £100 million.

Margaret Cole, the FSA’s director of enforcement and financial crime, said: “The failures at Standard Life arose because there were inadequate systems or controls in place to ensure that marketing material issued accurately reflected the investment strategy for the fund.”

However, the fine would have been £3.5 million but Standard Life agreed to co-operate with the FSA’s investigation.

Standard Life said: “We have learned important lessons from this mistake and have made significant improvements to our marketing literature processes to prevent the same thing happening again.”

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