Axa Wealth Services has to pay a £1.8 million fine for giving customers unsuitable investment advice.
Axa is contacting 26,000 customers who bought investments through the Clydesdale or Yorkshire Banks or West Bromwich Building Society as well as directly from the company.
The fine was levied by the financial conduct authority (FCA) after a review of Axa’s investment advice
Tracey McDermott, the FCA’s director of enforcement and financial crime, said: “AXA fell short of standards of advice it should have expected. Many were elderly, retired and financially inexperienced.
“The failure ended in an unacceptable risk of AXA selling products which were unsuitable for investors. AXA’s failures were avoidable, coming despite repeated warnings from regulators to the industry about investment advice. “
Unacceptable losses
Axa advisers in the banks and building societies sold 37,000 unsuitable investments which may have led to customers experiencing unacceptable losses.
The total amount invested was £440 million.
The FCA says some of the losses may be due to poor stock market performance, but found Axa did not consider the risk customers might take with their money or properly explain how the products worked.
Regulators were also concerned that advisors were paid bonuses related to their sales which could have influenced the way they explained the investments to customers.
The sales took place between September 2010 and April 2012.
“Customers who have made unacceptable losses will be fully compensated and anyone sold inappropriate products can switch or withdraw their investments,” said the FCA.
Find out more about Axa misselling investments
Warnings about bogus advisers
The FCA has also issued two warnings about bogus firms posing as regulated financial advisers:
- Grand Meridian Private Equity Ltd
- JP Sterling Associates
- Goldstein Brokers Limited
- CashInMyPension.com /James Cockle /Capital Solutions
- Letson Securities Limited
- Sachs Trust
- Chris Dawson (clone of FCA Approved Person)
- Alliance Capital Securities Ltd
Dealing with an unregulated firm
If you buy shares, save money or invest with an unregulated firm, you lose any protection offered by the Financial Ombudsman and the Financial Services Compensation Scheme. Broadly, you have no independent place to complain if the deal goes wrong and are unlikely to win any compensation.
Checking if a firm is regulated
Go to the Financial Services Register to check if a firm is regulated in the UK.
Reporting a suspected bogus adviser
Find out how to report unauthorised advisers on the FCA web site
