Santander’s British arm is under investigation for possible investment advice failures and could face a fine or license changes that prevent it from offering such services in future, four industry sources said.

Britain’s Financial Services Authority said yesterday it had referred a major high street bank to its enforcement division, the latest clamp-down on an industry tarnished by mis-selling and interest rate-rigging scandals.

UK banks are already facing bills totalling billions of pounds from a series of misdemeanors, including mis-selling payment protection insurance, misleading customers about interest rate hedging products and a global interest rate rigging scam.

The FSA declined to name the lender and Santander UK declined to comment on whether it was being investigated.

The financial regulator said the probe, which followed spot checks during a review of the quality of advice available at six major banks and building societies, would only have been ordered if the company in question had a history of poor advice. Shortly after this investigation was announced, Santander UK said it was reviewing the future of its retail investment advice arm, putting 800 jobs at risk.

It told staff at a scheduled meeting in Birmingham, in the English midlands, it was assessing its bancassurance business “given we can no longer be certain... whether we will definitely continue providing face-to-face advice”.

Santander UK had suspended investment advice in December and pulled its advisers “off the road” for more training because of new rules in Britain aimed at making financial advice more transparent for customers.

It said yesterday it would not take on new investment advice until it finds the right model.

The bank said no jobs were currently at risk, but said it had consulted unions and was working with other business areas to ensure that many of those who might be impacted are able to secure roles elsewhere in the group.

The FSA’s new retail distribution review, which kicked in on January 1, aims to ensure advisers are better trained and that fees for financial advice are more transparent.