HSBC fined for mis-selling of investment products
The selling of unsuitable investment products to elderly customers by HSBC subsidiary NHFA Limited has resulted in the banking giant being fined a record £10.5 million by the Financial Services Authority (FSA).
Individuals who were entering, or already in, long-term care were advised to choose asset-backed investment products, such as investment bonds, to fund their care costs. However, such products have a recommended five-year investment period, which forced customers with a shorter life expectancy to make early withdrawals.
The ensuing product charges, on top of the withdrawals, led to their funds reducing at a faster rate than should have been the case.
HSBC will now be required to pay an estimated £29.3 million in compensation on top of the fine.
This latest case of product mis-selling once again highlights the importance of seeking independent advice when choosing the right investment vehicle to match an individual’s needs.
