LONDON (Reuters) - Britain's Financial Conduct Authority has fined AXA Wealth Services <AXAF. PA> 1.8 million pounds ($2.85 million) for giving unsuitable investment advice to thousands of retail customers.
The British wealth management unit of the French insurer sold approximately 37,000 investment products worth 440 million pounds ($700 million) to 26,000 retail customers, many of whom were elderly, retired and financially inexperienced. It is unclear what losses they have suffered, or could incur.
Some of the advice given by AXA representatives based in the branches of Clydesdale Bank, Yorkshire Bank and the West Bromwich Building Society from September 15 2010 to April 30 2012 had "serious defects", the FCA said in a statement.
The advisers did not always fully explain the risks of the stock-market-based products, how fees might affect expected returns nor did they check if the customer could cope financially if the investment turned sour.
"The failings put a significant number of customers at risk of buying unsuitable products. Many of AXA's shortcomings only came to light during a review by the FCA," it said.
The company said it fully co-operated with the FCA during its investigation, and accepts the findings within its report. It has agreed to contact customers to ensure they have an opportunity to avoid any potential future losses.
It qualified for a 30 percent discount on its fine after agreeing to a settle at an early stage of the investigation.
AXA's is the second FCA fine on a British investment management group in as many weeks. On September 3, Aberdeen Asset Management <ADN. L> was fined 7.2 million pounds for failing to protect client money properly over three years to 2011.
(Reporting by Huw Jones and Sinead Cruise; Editing by Louise Ireland)