AXA Scams In UK

The Financial Conduct Authority (FCA) has imposed a £4m fine on insurance brokerage firm Bluefin for promoting products marketed by its former parent company AXA, while purporting to be offering impartial advice to customers, the FCA has announced.

The fine had been calculated at £5.75m, but the regulator took into account Bluefin’s early acceptance of its culpability, avoiding a drawn-out investigation, for which the FCA gave the company credit that resulted in a 30% reduction of the fine.

The activity that the regulator complained about took place between March 2011 and December 2014, a period during which Bluefin, a large insurance broker with 1,500 staff staff in 45 offices across the UK, was then wholly-owned by UK insurance giant AXA.

“During this time,” the regulator found, Bluefin held itself out to be ‘truly independent’ in the advice it provided and the insurers it recommended to customers.

However, Bluefin failed to implement adequate systems and controls to manage the conflict that arose from AXA’s ownership of Bluefin, the FCA said.

Independence ‘compromised by culture’

The broker’s independence was “compromised by its culture”, the regulator said, a structure that meant that the broker unfairly promoted AXA business strategies.

There was, the FCA found, a policy that focused on increasing the business placed with the parent company, and this was prioritised over ensuring that customers were treated fairly.

Bluefin brokers did not disclose this policy, the FCA said, so customers “risked being misled into believing they were dealing with a broker who would conduct an unbiased search of the market”.

FCA executive director of enforcement and market oversight Mark Steward said that insurance brokers must “promote a culture” in which they act in their customers’ best interests and provide them with the information they need to make an informed decision.

“This is central to the relationship between the industry and its customers,” he said.

“It is also unacceptable that firms hold themselves out as independent when they are not.”

‘Historical, legacy’ issue

At the end of 2016, Bluefin was acquired by Marsh, who combined the business with Marsh’s financial advisory and planning group Jelf to form a single business entity led by chief executive Phil Barton.

When contacted by International Investment, a spokesperson for Marsh, who made the point that this fine related to a historical, or legacy, issue that happened at a time when Bluefin was under ownership by AXA and not by Marsh, said: “We were aware of the investigation into these practices in Bluefin when we acquired the business at the end of last year.

“After the transaction closed we reviewed and, where appropriate, improved Bluefin’s practices and policies to align them with our own high, client-centric standards.

“During this time we have also worked with the FCA to ensure that this case was fully resolved.”