Insurer-owned adviser fined for claiming to be independent

Insurer-owned adviser fined for claiming to be independent

The Financial Conduct Authority (FCA) has fined Bluefin Insurance Services Limited £4m for pushing its parent company's products while claiming to be independent.

The FCA found Bluefin's independence was compromised by its culture, which included a policy focused on increasing the business placed with its parent company over treating customers fairly.

An investigation found it had inadequate systems and controls and failed to provide information to its customers about its independence in a way that was clear, fair and not misleading.

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Mark Steward, executive director of enforcement and market oversight at the FCA, said: "Insurance brokers must promote a culture in which they act in their customers' best interests and provide them with the information they need to make an informed decision. 

"This is central to the relationship between the industry and its customers.

"It is also unacceptable that firms hold themselves out as independent when they are not."

Between 9 March 2011 and 31 December 2014 Bluefin, which at this time was owned by Axa UK, held itself out to be "truly independent" in the advice it provided and the insurers it recommended to clients.  

But it failed to implement adequate systems and controls to manage the conflict that arose from its ownership.  

Bluefin brokers did not disclose the policy of increasing the business it placed with its parent company and the FCA said customers risked being misled into believing they were dealing with a broker who would conduct an unbiased search of the market.

Bluefin was sold by Axa on 31 December 2016 and is no longer owned by an insurance company.  

It agreed to settle at an early stage of the investigation and received a 30 per cent reduction in their overall fine. 

Without this discount the fine would have been £5.74m.

The FCA said it made no criticism of any member of the Axa Group other than Bluefin.