Aviva fined £8.2m for failing to keep customers' money safe
Insurer broke FCA rules for more than two years after it outsourced admin to third party
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Your support makes all the difference.Aviva has been hit with a £8.2m fine for failing to comply with rules in place to protect its customers’ money.
The Financial Conduct Authority said Aviva Pension Trustees UK and Aviva Wrap UK had inadequate controls in place after outsourcing the administration of custody assets to a third party firm.
Mark Steward, the FCA’s director of enforcement and market oversight, said Aviva had “failed to ensure that it had adequate controls and oversight arrangements to effectively control these outsourced activities.’
Mr Steward warned other financial services firms that they could “delegate but not abdicate” their responsibilities to keep clients’ money safe.
The FCA said Aviva had breached rules around segregating its customers money for more than two years between 1 January 2013 and 2 September 2015, after Aviva handed over responsibility for custody of assets.
Rules around client money, known as CASS rules, were overhauled after the historic bankruptcy of Lehman Brothers in 2008 and the subsequent multi-year trial for its clients’ assets.
Andy Briggs, chief executive of Aviva UK Life, apologised and said the insurer had accepted the FCA's findings.
“This should not have happened and we are sorry. Aviva’s customers have not suffered any loss and there has been no impact on advisers. We have addressed and resolved the issues identified. We have made improvements to ensure we have clear oversight of the processes undertaken on the adviser platform, and remain vigilant in our continued monitoring through a dedicated and expert team.”
Aviva said it had undertaken a review of all of its client assets processes and recruited a specialist team to focus on keeping customer money safe.
A spokesperson for Aviva said: “Aviva UK life has reached an early agreement with the FCA regarding historical breaches of FCA rules relating to oversight of administration for client money and assets on Aviva’s UK life adviser platform. Aviva has cooperated fully with the FCA during its review, unreservedly accepts the FCA’s decision, and has agreed to pay a fine of £8,246,800.
“Aviva has taken action to address the areas of concern and customers have not suffered any loss. Customers’ money and assets are secure with Aviva and are appropriately managed on the adviser platform, and there has been no impact on advisers.”
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