Standard Life fined £2m over pension fund

STANDARD Life has been fined £2.45 million for misleading customers over a fund sold as a cash product despite being more than 50 per cent invested in risky mortgage-backed securities.

By The Newsroom

Published 28th Feb 2019, 14:03 BST

The Financial Services Authority (FSA) penalty – its first significant fine of 2010 – came after the regulator found "serious systems and controls failings" that led to misleading marketing material for the Edinburgh-based firm's Standard Life Pension Sterling Fund.

The fund at one stage had 2.2 billion in assets under management and 98,000 customers.

But by July 2007, the majority of funds under management were invested in mortgage-backed securities, which were the risky investments at the heart of the financial crisis.

The FSA said customers were exposed to a "risk of unexpected capital losses" after Standard Life Assurance failed to communicate how the fund's investment strategy had changed.