Release Date: 6th December 2017
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has fined Bluefin Insurance Services Limited (Bluefin) £4,023,800 for failing to maintain adequate systems and controls and for misleading customers about its independence. Between 9 March 2011 and 31 December 2014, Bluefin, wholly owned by AXA UK Plc at the time, claimed to offer ‘truly independent’ advice and insurer recommendations. However, Bluefin’s independence was compromised by a business culture and strategy that prioritised increasing business with its parent company, AXA, over fair treatment of customers.
The FCA found that Bluefin did not properly manage the conflict of interest arising from its ownership. Bluefin brokers failed to disclose this conflict to customers, risking misleading them into thinking they were receiving unbiased advice. This lack of transparency meant customers were unaware that Bluefin’s recommendations were influenced by the company’s relationship with AXA.
Mark Steward, Executive Director of Enforcement and Market Oversight, emphasised the importance of insurance brokers acting in their customers’ best interests and providing clear, fair, and non-misleading information. He stated, “It is also unacceptable that firms hold themselves out as independent when they are not.”
Bluefin agreed to settle the investigation early, which resulted in a 30% reduction of the fine. Without this discount, the fine would have been £5,748,200. The FCA clarified that no criticism is directed at any other member of the AXA Group besides Bluefin. Bluefin was sold by AXA UK Plc on 31 December 2016 and is no longer owned by an insurance company.
Key Takeaways for Other Firms:
- Transparency: Ensure customers are fully informed about any potential conflicts of interest, especially regarding company ownership.
- Adequate Systems and Controls: Implement robust systems to manage and disclose conflicts of interest.
- Customer Interests First: Promote a culture that prioritises fair treatment of customers over business interests.
- Accurate Representations: Do not misrepresent the independence of advice or services offered.
In conclusion, the FCA’s action against Bluefin highlights the importance of transparency and integrity in the financial services industry. Firms must prioritise customers’ best interests and ensure their practices align with the high standards required by the FCA.
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