The FCA said that AXA's failings put a "significant number of customers" at risk of buying unsuitable products.

In addition, AXA has agreed with the FCA to contact all customers who may be affected by its failings and a third party will also oversee a review of any issues identified as a result.

Customers who suffered loss as a result will receive full compensation and those sold inappropriate products will be able to switch or withdraw their investment, the FCA said.

AXA sold approximately 37,000 investment products to 26,000 retail customers between 15 September 2010 and 30 April 2012. The products were sold through  AXA’s advisors based in the branches of Clydesdale Bank, Yorkshire Bank and the West Bromwich Building Society.

These customers, who tended to have low levels of experience in investments and were typically in or nearing retirement, invested £440 million with AXA.

The FCA said it found serious defects in the way AXA advised customers on investments.

In particular, AXA did not always explain in clear terms the level of risk customers would be taking or ensure that customers could manage financially if their investment fell in value.

The firm also failed to gather sufficient information from customers before making investment recommendations to them.

In addition, AXA failed to advise customers about how product charges would affect the returns they could expect to receive from their investment or properly explain to customers why recommended investments were considered to be suitable for them.

“AXA fell short of its responsibilities to its customers, many of whom were elderly, retired and financially inexperienced. Its failures resulted in an unacceptable risk of AXA selling products which were unsuitable for its customers. AXA’s failures were avoidable, coming despite repeated warnings from the FCA’s predecessor to the industry about investment advice," said Tracey McDermott, the FCA’s director of enforcement and financial crime.

Earlier this month, the FCA hit Aberdeen Asset Managers and Aberdeen Fund Management with a £7,192,500 fine for failing to protect client money placed in money market deposits with third party banks between September 2008 and August 2011. For more on this story, click here.