Now banks are being scrutinised for potential mistakes 70 years ago

Coutts has already looked at a file from 1957 and could examine even older investments. This is getting ridiculous.

by Rachel Savage
Last Updated: 23 Jul 2014

There’s banks compensating clients for misselling (cf the PPI scandal), and then there’s Coutts. The Queen’s private bank has written to investors warning they may have been sold products not quite commensurate with their appetite for risk.

All well and good, except some of the investments it is looking into may end up being as old as 70 years. D Day was 70 years ago. That’s a helluva lot of compound interest clients could have missed out on if they turn out to have been sold short.

The review into investments held on 26th November 2012 (after which Coutts changed its advice procedures) came after a ‘Dear CEO’ letter was sent by the FSA to several wealth managers back in 2011 (presumably saying something along the lines of, ‘We’ve got our eye on you’).

The bank doesn’t expect to finish its probe until 2015 and wouldn’t be drawn on how much it will pay back or how they would work that out – early days, apparently.

‘Looking back, there have been some instances where the advice given during our previous advice process could have been better,’ Coutts’ UK chief exec Michael Morley said in a statement. ‘If clients have suffered any financial detriment, they will be compensated in full.’

Coutts has already looked at a file from 1957 (a spokesperson assured MT that those investments were indeed ‘suitable’), and MT can’t fault its dogged diligence. After all, if a family has invested with the RBS-owned bank for umpteen generations you’re going to want to keep them sweet.

Coutts will also want to make any amends super speedily after being fined £6.3m by the FSA in 2011 for selling products linked to collapsed insurer AIG and £8.75m for failings in its money laundering controls in 2012.

Nonetheless, it does seem a tad ridiculous to have to go right back into the dark ages of paper records. Then again, where lots of cash is concerned it seems bygones can never really be bygones.

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