Barclays statement following FSA announcement

18 Jan 2011 09:26 GMT

Paul McNamara, Managing Director of Insurance and Investments, Barclays said:

“The Financial Services Authority (FSA) has today announced that it is fining Barclays for failing to take reasonable care to ensure the suitability of its advice regarding two funds sold to certain customers between July 2006 and November 2008 (the Aviva Global Balanced Income Fund and the Aviva Global Cautious Income Fund).

“Barclays has worked in an open and co-operative way with the FSA from the start of the investigation through to settlement of this matter; the FSA said that it does not consider that Barclays deliberately or recklessly contravened regulatory requirements. We are focused on ensuring that we identify those sales which were unsuitable and provide appropriate compensation so that affected customers do not suffer loss.

“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.

“In relation to these two particular investment products, we failed to give adequate information to some of our customers to help them make the right decision about how to invest their money. As a result, a number of customers may have invested in funds which exposed them to more risk than they were comfortable with and this, coupled with the unprecedented financial crisis, meant that some were adversely affected.

“We stopped selling these investment products two years ago and since then we have been working hard to ensure this does not happen again. We have reviewed and made improvements to our sales and advice processes, including the documentation provided to customers, and the level of supervision over advisers. We have also strengthened the training we provide our advisers to include a stronger focus on product knowledge, in order to ensure we are always giving customers the best possible guidance and information.

“Over 12,000 of our customers invested in these two funds. We are now working with a firm of accountants as part of a review to determine how many customers have been affected.

“Customers who have invested in these funds who have questions, can also call our dedicated hotline 0800 587 7495 or visit our website www.barclays.co.uk/investmentfundinformation.

“We are determined to put things right for the customers who we have let down in this instance. Furthermore, we are committed to delivering the best possible service to every one of our 15 million customers in the UK retail business.”