The Financial Conduct Authority (FCA) has fined Standard Life Assurance Limited £30m for failures relating to the sales of annuities without advice.

The FCA said that Standard Life failed to have adequate controls in monitoring the quality of calls between its call handlers and non-advised customers.

Standard Life also offered its staff “large financial incentives” to sell annuities, which the FCA believed encouraged the staff to put their own financial interests ahead of their customers.

During this period, nearly 22 per cent of call handlers were paid more than 100 per cent of their basic salary in bonus payments.

This led to an increase in risk that Standard Life’s call handlers would not provide customers with the necessary information to make an informed decision on which annuity would be best for them.

Commenting, FCA executive director of enforcement and market oversight, Mark Steward, stated: “Standard Life Assurance Limited's controls needed to place fairness to customers at their heart.

“Here, the financial incentives available to staff for selling non-advised annuities by telephone created conflicts which led to unfair outcomes for some customers.

“Firms must have controls in place to ensure they are prioritising fairness to customers.”

The FCA added that Standard Life used call guidelines which give its handlers “significant discretion” about how they communicated with customers, which meant that the firm failed to provide the appropriate information.

In January 2017, Standard Life voluntarily agreed to identify and repay customers who were likely to have suffered as a result of its misconduct. As of May 2019, the firm had paid approximately £25.4m to 15,302 customers.

Standard Life did not dispute the FCA’s decision and its acceptance of the findings meant the firm qualified for a 30 per cent discount, otherwise the fine would have totalled nearly £44m.

Commenting on the decision, Standard Life CEO and Phoenix Group director, open business, Susan McInnes, said: “While this is an historic issue and one we were aware of when we acquired Standard Life Assurance Limited, we would like to apologise to affected customers, all of whom we have already been in contact with as part of the programme of customer redress. We have also reviewed and updated our telephone practices as part of this process.

"Our remediation programme for affected customers is progressing well and we expect it to be completed by the end of the year.”

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