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Major high street bank Santander may be fined by the FSA for giving bad financial advice when the FSA ran a mystery shopping review of the banks.
The FSA ran the mystery shopping exercise between March and September 2012 to assess the quality of advice given to customers looking to invest a lump sum. They assessed 231 mystery shops across six major firms in the retail banking sector.
While the FSA were happy with the advice given to around three quarters of the customers, they felt the advice was unsuitable for 11% of mystery shops and the adviser didn't gather enough information to be sure their advice was suitable in a further 15%.
The FSA said the levels of poor advice varied significantly between the six firms and were particularly concerned with the high level of poor advice they found in some. The FSA said it had referred one of the six banks to it's enforcement division.
Although Santander will not confirm that it is the bank being investigated, in December 2012 they suspended their investment advice force as they were not ready for tougher new RDR (retail distribution review) rules. We understand that Santanders 800 investment advisers have now been told that their jobs are at risk as the bank conducts a strategic review.
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