RBS sets aside £206m for unsuitable advice probe

The Royal Bank of Scotland will pay out up to £206m in costs to cover two FCA investigations into its provision of investment advice pre and post-RDR.

Money Marketing reported the regulator was still looking into historic pensions and investment advice at the bank last October.

Predecessor watchdog the FSA investigated investment advice offerings at a number of banks and building societies and produced a report on failings in 2013.

At the time, RBS was ordered to review its business and make contact with customers that had received investment advice on certain lump-sum products between March and December 2012.

Redress was paid to a number of customers following this.

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A specific review into investment advice given by RBS between January 2011 and April 2015 was then carried out following the FSA’s wider investigation.

In a results statement released today, RBS says this investigation is “materially complete” and provisions related to it have set the bank back £206m so far.

Of that figure, £144m had been utilised at the end of last year.

The second phase of the regulator’s investigation covering sales in 2010 started in April 2018 and was targeted for completion by the end of 2018.

RBS confirms this has been extended to April this year.

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The results say: “RBS later agreed with the FCA that it would carry out a review and remediation exercise relating to certain investment, insurance and pensions sales. In addition, RBS agreed with the FCA that it would carry out a remediation exercise for a specific customer segment who were sold a particular structured product.”

The bank reported profits before tax of £3.3bn for last year up from £2.2bn for 2017.


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There are 3 comments at the moment, we would love to hear your opinion too.

  1. And so it continues. Are the banks really a suitable place for advice? Will Schroders reputation be tarnished by linking with Lloyds? If history is any guide Lloyds proposed foray into advice is likely to attract a compensation bill.

  2. Investments, insurance, pensions and structured products encompass just about everything (apart from mortgages and PPI) don’t they? Are there any product sales that RBS aren’t going to have to review?

  3. I find this both very sad and amazing.

    Post RDR????

    Fines mean nothing, compensation means nothing.

    Has the time come to suspend permissions to trade until the mess is cleared up. That would carry more weight and really speed things up in the putting things right dept.

    Just a thought

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