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Release Date: 23rd July 2019

To access the original FCA document, click here.


The Financial Conduct Authority (FCA) has fined Standard Life Assurance Limited (SLAL) £30,792,500 for failures related to non-advised sales of annuities. These failures included inadequate controls over the quality of information provided to customers and excessive financial incentives for call handlers, which compromised the fairness of customer outcomes.

Annuities, being complex financial products, require customers to have clear and accurate information, especially in non-advised sales where decisions are made without financial advice. SLAL’s inadequate controls and high financial incentives for sales staff created significant risks of mis-selling. Sales staff were motivated by large bonuses, which sometimes led to them prioritising their financial gains over the customers’ best interests.

Mark Steward, Executive Director of Enforcement and Market Oversight at the FCA, highlighted that SLAL’s controls failed to ensure fairness to customers. He noted that the financial incentives for selling non-advised annuities led to unfair outcomes for some customers.

Firms selling non-advised annuities are required to inform customers that better rates might be available in the open market and to provide information about enhanced annuities for those with health or lifestyle factors that could shorten life expectancy. SLAL’s high-level call guidelines allowed call handlers too much discretion, resulting in some customers not receiving appropriate information about enhanced annuities or the benefits of shopping around.

SLAL’s call handlers were eligible for significant bonuses and rewards if they met sales targets, with nearly 22% of them receiving bonuses exceeding 100% of their basic salary. This incentivised prioritising sales over fair customer outcomes. SLAL also failed to implement robust systems and controls to mitigate these risks and did not sufficiently monitor call quality or provide senior management with adequate information to identify failures in call monitoring.

On 31 January 2017, SLAL voluntarily agreed to review past business practices and compensate customers who suffered losses due to these failures. As of 31 May 2019, SLAL had paid approximately £25.3 million to 15,302 customers.

SLAL, formerly part of Standard Life Aberdeen, was sold to the Phoenix Group on 31 August 2018. The past business review continues under Phoenix’s ownership, with completion expected by the end of 2019. Customers who purchased a non-advised annuity from SLAL can contact the company directly for assistance.

SLAL accepted the FCA’s findings and qualified for a 30% discount on the fine, reducing it from £43,989,300 to £30,792,500.

Key Takeaways for Other Firms:

In conclusion, the substantial fine imposed on SLAL underscores the importance of maintaining robust controls and prioritising customer fairness in financial product sales. Firms must ensure comprehensive monitoring and training to prevent mis-selling and protect consumer interests.

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