FCA has fined AXA Wealth Services Ltd (Axa) £1,802,200 for failings in its investment advisory business. Axa sold investment products through its advisers based in-branch at three banks and building societies. FCA found that, over an 18-month period, it:

  • failed to have in place an adequate process for establishing the level of risk customers were willing and able to take;
  • failed to ensure its advisers gathered and kept all information they needed before making recommendations to customers;
  • failed to ensure advisers paid enough attention to customers' investment objectives;
  • did not have in place proper policies to tell customers about charges relating to their products;
  • did not ensure customers received adequate explanation as to why products were recommended as being suitable for them;
  • had inadequate controls over incentives paid to sales advisers; and
  • did not have in place adequate procedures for monitoring sales of investment products.

FCA acknowledged the improvements Axa made to its policies and the low rate of customer complaint. It also noted customer detriment may be low given the rate of investment return to date. However, it saw potential for future losses and Axa agreed to contact all customers, compensate those who suffered loss and enable customers to exit products should they wish. Axa benefited from a 30% early settlement discount on a fine which was based on 10% of its total relevant revenue for the relevant period. (Source: FCA Fines Axa Wealth for Advice Failings)