The favouring of hedge funds paying high fees at the expense of lowlier customers by two former fund managers has cost Aviva’s investment business almost £150 million in fines and compensation.
The Financial Conduct Authority fined Aviva Investors £17.6 million yesterday for failing to control conflicts of interest that meant that its fund managers had incentives to direct investments to customers that paid top-notch performance fees.
It has also paid £132 million in compensation to eight of its own life funds, which lost out as a result of the activities of the two former bond fund managers, who indulged in cherry-picking for more than six years.
As it handed down the fine for the “serious” failings, the FCA ruled that Aviva Investors “failed to take