Santander has been fined over £12 million by regulators for failing to ensure that it provided suitable investment advice to its customers.
The Financial Conduct Authority (FCA) imposed the fine after finding a number of deficiencies in the bank’s treatment of investment customers between January 2010 and December 2012.
The regulator found that advisers had not always factored in the level of risk that customers wished to take.
In a number of cases, advisers failed to carry out the periodic checks to ensure that customers’ investment products were suitable for their needs. Premium Investment customers in particular were overlooked.
The FCA also found fault with the bank’s training of new advisors, and said that inadequate monitoring measures allowed poor advice and misleading practices to go undetected.
Tracey McDermott, the director of enforcement at the FCA, said Santander had let down customers who had placed their trust in the bank to help them make the best decisions.
“If trust in financial services is going to be restored, which it must be, then customers need to be confident that those advising them understand, and are driven by, what they need”, she said.
Santander has apologised and said it will contact affected customers and discuss possible compensation measures.
It stressed that stock market performance during the recovery meant that customers were more likely to have made gains than losses.
The bank stopped providing in-branch investment advice in 2012 after the erstwhile regulator, the Financial Services Authority, raised concerns about the bank’s investment advice procedures.
Santander’s head of UK banking, Steve Pateman, said the bank had already addressed these procedures to ensure that the same mistakes could not reoccur.
Customers will be offered the opportunity to withdraw from investments, while those with Premium Investment products will receive a new annual review of their portfolio.