The Financial Services Authority (FSA) has fined Barclays Bank plc £7.7m following failures regarding the sale of two funds.
The bank has indicated it will contact customers and pay compensation where this is appropriate, which could total some £60m.
Barclays sold Aviva’s Global Balanced Income Fund (the Balanced Fund) and Global Cautious Income Fund (the Cautious Fund) to more than 12,000 people between July 2006 and November 2008, with investments of £692m.
However, the bank failed to ensure the funds were suitable for customers and reflected their investment objectives, financial circumstances and investment knowledge and experience.
In addition, Barclays did not give adequate training to staff selling the products, provided product brochures and other documents that failed to paint a true picture of the risks involved and lacked adequate procedures pertaining to monitoring sales processes.
According to the FSA investigation the bank itself had identified problems by June 2008, but did not correct them.
Margaret Cole, FSA MD of enforcement and financial crime, emphasised that the organisation required financial institutions to have robust procedures in place to provide consumers with accurate advice.
The fine, which is the highest the FSA has imposed for a retail failing, follows a £2.8m fine handed to RBS and NatWest for a number of failings in handling complaints.