HSBC Fined £10.5m Over Poor Investment Advice To Elderly

Britain’s largest bank, HSBC, has been fined a total of £10.5 million by the Financial Services Authority over investment bond advice it gave to more than 2,000 elderly customers. This is the largest penalty ever imposed by the City regulator for organisations breaching its rules.

Another organisation which may need to rely on its professional indemnity insurance in this case is the Nursing Home Fees Agency (NHFA), a subsidiary of HSBC which closed to new business last July. For improperly advising elderly customers on investment bonds, the NHFA could face a compensation payout of around £29.3 million.

Between 2005 and 2010, the NHFA is understood to have advised 2,485 elderly customers, with an average age of 83, to buy investment bonds to help them pay for their long-term care. The investment period for these bonds was five years, and in a number of cases, this was longer than the customer’s life expectancy.

Brian Robertson, the chief executive of HSBC in the UK, has said that he is “profoundly sorry”. He also said:

“I can guarantee that every customer who is found to have not been treated fairly will not be disadvantaged.”

Leave a comment