HSBC to pay out $65m for misadvising elderly clients
Posted on 06 December 2011 with 2 comments from readers
HSBC has been fined $16 million and ordered to pay tens of millions in compensation to elderly clients its misadvised in the UK. The case against the bank started six years ago so some of those affected will already be dead.
Professional wealth managers from the bank wrongly advised clients who wanted to save money in case they needed to go into a care home, and put their money into long-term investments rather than short-term options that were more appropriate for their age, a court in the UK ruled yesterday.
Scandalous case
This is absolutely scandalous and the fine and compensation bares no relation to the damage done to people in their twilight years in terms of worry and lost income. Why was this not settled out-of-court years ago?
The lesson is surely that managing your own financial affairs is always the best approach. You should always take advice from multiple sources and think for yourself.
Don’t assume that a bank with a good name will act in your interest rather than its own. Do look at the small print and don’t accept investment schemes that demand a large, upfront payment.
You should always make sure that 100 per cent of your money is actually invested, and if an investment institution cannot offer that then for goodness sake do it yourself or go elsewhere.
If elderly people going into a bank for best advice on how to prepare for their final years cannot be guaranteed best practice then what are we to expect for fit and wealthy expatriates in the Gulf?
2 Comments posted by readers:
Thank you for this piece – I’ve lost money before by trusting large “notable” institutions and believing that they were more numerate and able than me – big mistake never to be repeated; now I count slowly but accurately and keep control over my own cash – after all who is going to care more about it than me? When in doubt money on deposit is better than throwing it away on some trashy scheme.
A sobering article. Average age of the customers was 83. No one went to jail for this fraud. Presumably the sales people and their bosses kept their bonuses.
Even the $65M bill pales into significance against the $550M that the bank received from its clients (using Daily Telegraph figures).