Barclays pay the price for poor investment advice


High street banks have again been cast in a negative light as the Financial Services Authority have ordered Barclays to pay a massive £60 million in compensation to customers who were deemed to be given bad investment advice. Barclays have also been told to cough up a further £7.7 million in fines.

The FSA imposed these immense penalties after judging the bank to have “serious failings” in the manner in which it sold investment funds to customers, most of whom were approaching or already in retirement.

According to the FSA Barclays did not adequately advise 12,331 customers with regards to risks that were involved with the funds, in total customers put in £692 million into the funds.

Margaret Cole, the FSA's managing director of enforcement and financial crime, said: "The FSA requires firms to have robust procedures in place to ensure any advice given to customers is suitable. Therefore, when recommending investment products, firms should take account of a customer's financial circumstances, their attitude to risk and what they hope to achieve by investing. On this occasion however, Barclays failed to do this and 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.”

The fines dished out by the FSA are the biggest in in the regulatory organisation’s history and Barclays Bank have acknowledged that “on this occasion we let our customers down.”

To learn more about investment options and offshore savings speak to a recommended IFA for impartial financial advice.