The U.K. Financial Conduct Authority fined Prudential Assurance Co. £23.8 million ($29 million) for misinforming retirees about annuity options, the regulator said Monday.
From July 2008 to September 2017, Prudential sold non-subadvised annuities — options for which a customer selects the annuity based on factual information and does not receive financial advice — directly to Prudential's existing pension policyholders, without providing them information about the annuity market.
The FCA said the firm failed to ensure that customers were consistently informed that they may get a better product elsewhere, which would offer a higher income in retirement. According to U.K.'s financial services watchdog, Prudential also failed to monitor calls and failed to check documentation used by call handlers.
"Prudential is now rightly focused on redress and today's financial penalty reinforces the cardinal obligation of fairness that firms owe to customers," said Mark Steward, FCA executive director of enforcement and market oversight, in a news release Monday.
As of Sept. 19, Prudential committed to £110 million to remedy 17,240 customers. The firm did not dispute the FCA's findings, which reduced the fine from over £34 million.