According to an FCA notice, the firm put customers at risk of buying unsuitable products between September 2010 and April 2012. In this period it sold approximately 37,0000 Axa investment products to 26,000 retail customers of Clydesdale Bank, Yorkshire Bank and the West Bromwich Building Society.
The customers invested a total of £440m, tended to have low levels of investment experience and were typically in or near retirement.
The FCA notice claimed the firm failed to explain risk levels to customers, failed to advise them on how product changes would affect returns, failed to gather sufficient customer information before making investment recommendations, and failed to properly explain why recommended investments were suitable.
Axa Wealth has accepted the findings of the FCA’s investigation, including the fine, and has agreed to contact all customers who may be affected by its failings, and the potential need to pay out compensation.
The firm is the latest to be hit by regulatory fines for unsuitable advice in 2013. Others include Sesame Ltd, which was hit by a £6m fine in June, and JP Morgan, which was hit with a £3m fine in May.
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Chris Dunston, chartered financial planner for Devon-based Artavia PFS, said: “I’m astounded. This is a basic compliance issue. These types of investors are the people who need the most care taken with them.”
