Barclays had mis-sold two income funds to more than 12,000 investors during the financial crisis causing them losses of millions of pounds. The Financial Services Authority (FSA) has imposed a record £7.7 million in fines on the financial group for product mis-selling.
Accusing Barclays of not understanding risks associated with investing in Aviva’s Global Balanced Income Fund and Global Cautious Income Fund, FSA charged Barclays of misjudging the suitability of these products for its clients – many of whom were close to retirement.
FSA’s Managing Director of Enforcement and Financial Crime – Margaret Cole said in statement: “The FSA requires firms to have robust procedures in place to ensure any advice given to customers is suitable”.
Accusing Barclays of giving wrong advice, she said: “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”.
Barclays has already apologized to the investors promising them adequate compensation for the losses suffered.
Regretting the client’s loss, Paul McNamara – Managing Director of Investments and Insurance said: “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”.