FSA fines Barclays £7.7m
Banking giant Barclays has received a fine of £7.7 million – imposed by the Financial Services Authority (FSA) over poor investment advice.
The City Watchdog has also ordered the bank to compensate up to £60 million to customers of two investment funds.
The bank has apologised for the failures and said it will “put things right.”
The fine comes just a week after the Royal Bank of Scotland (RBS) and its NatWest subsidiary were fined by the FSA for “multiple failings”.
The FSA said the fine included delays in customer response, poor quality investigations into complaints and lack of communication with its customers.
Both banks agreed to settle at an early stage in the investigation and therefore qualified for a 30% reduction on the original fine of £4 million.
Meanwhile, returning to Barclays, it sold Aviva’s Global Balanced Income Fund – the Balanced Fund – and the Global Cautious Income Fund – the Cautious Fund – to 12,331 people with investments totalling £692 million between July 2006 and November 2008.
The majority of the customers were retired or close to retirement and more than 1,700 of them complained about the advice they received.
Commenting on the fine, Margaret Cole, the FSA’s managing director of enforcement and financial crime, said: “Thousands of investors, many of whom were seeking to invest their retirement savings, have suffered. To compound matters, Barclays failed to take effective action when it detected the failings at an early stage.”
Meanwhile, Paul McNamara, managing director of insurance and investments at Barclays, issued an apology:
“We know that on this occasion we let our customers down and did not do all we could have done to meet the high standards that our customers expect from us and for this we are sorry.”