The FSA is investigating Santander over the quality of its investment advice following a mystery shopping exercise, Money Marketing understands.
The regulator published the results of its mystery shopping review into six major banks and building societies earlier today. The FSA said one firm had been referred to enforcement but did not name the firm.
In December Money Marketing revealed Santander had suspended its investment advice service and pulled 800 advisers off the road with immediate effect because they were not fully trained to meet “RDR suitability and processes” requirements . At the time, Santander said the advisers would be put on a six-week “intensive training programme” to bring them up to speed.
All 800 advisers have been summoned to a crunch meeting in Birmingham today.
A spokeswoman for Santander UK declined to comment on whether it had been referred to enforcement. The FSA also declined to comment.
Responding to the FSA’s mystery shop review, a Santander UK spokeswoman says: “We are considering the findings in the context of the significant actions we took in 2012 to prepare for the post-RDR world. We continue to believe it is important to offer customers access to a broad range of financial products which are suitable to their needs and individual situations, and we are working towards that objective.”
The FSA carried out its mystery shopping review between March and September and focused on the quality of advice given to consumers looking to invest a lump sum. Out of a total of 231 mystery shops, the FSA says in 11 per cent of cases the evidence suggests the adviser gave unsuitable advice, and in 15 per cent the adviser did not gather enough information to ensure their advice was suitable.
The regulator says in response to the review firms have agreed to take immediate action including retraining advisers, making substantial changes to their advice processes and controls for new business, and undertaking past business reviews to identify historic poor advice and put this right for customers.
Lloyds Banking Group is separately being investigated by the FSA following the regulator’s review last September into how sales incentives drive misselling.