Aviva investors, an asset management company global assets under management of over £246 billion, with expertise ranging from equities, fixed income, multi-assets and property management. The firm has been fined by the FCA over conflict of interest issues.
It was discovered that over a period of eight months, that Aviva investors experienced system and control failures, leading to unfair treatment of investors and their investment which has resulted in $230million in fines and compensation.
This is inclusive of a £17.6m fine from the Financial Conduct Authority (FCA) which is believed to have been discounted by 30% by the FCA due to Aviva co-operation in investigation in an "exceptionally" open manner, as described by the FCA.
The issue arose from a discovery that a range of funds that required varying levels of performance fees to traders were run from the same desk, instead of being segregated. This, is believed to be counter-productive to investors, since this could encourage dealers to pay less attention to funds which bring smaller rewards.
The chief executive of Aviva Investors, Mr. Euan Munro, said that Aviva fully cooperated with the FCA over the breaches: "We fully accept the conclusions of this investigation. We have fixed the issues, improved our systems and controls and ensured no customers have been disadvantaged."
Additionally, the Acting Director of Enforcement and Market Oversight at the FCA, Georgina Philippou said: “Ensuring that conflicts of interest are properly managed is central to the relationship of trust that must exist between asset managers and their customers. It is also a fundamental regulatory requirement. This case serves as an important reminder to firms of the importance of managing conflicts of interest effectively by implementing a robust control environment with effective systems to manage the risks. Not doing so risks customers’ interests being overlooked in favour of commercial or personal interests.”