A subsidiary of Standard Life plc which provides pension and life assurance products to retail customers has been fined £2,450,000 for breaches of FSA Principle 3 and Principle 7 (reduced from £3,500,000 for early settlement).

The Principle 3 breaches arose from failures to ensure there were proper systems and controls regarding marketing material produced in relation to its Pension Sterling Fund and in relation to the prompt and full investigation of concerns regarding the marketing material.

The Principle 7 breaches arose from failures to ensure that the marketing material was clear, fair and not misleading. In particular, although the majority of the fund was invested in floating rate notes, marketing literature referred to the fund being wholly invested in cash.

Complaints were made by consumers and concerns raised by employees but internal reviews of marketing material were too narrow and failed to identify the failings properly. These failings led to consumers being misled and to a risk of unexpected consumer losses.

For further information: Standard Life Assurance Limited