Coutts is to pay the Financial Services
Authority (FSA) £6.3m ($10.2m) after failing to provide adequate
advice to clients about the risks associated with AIG Life

An FSA investigation found that between
December 2003 and September 2008 Coutts failed to adequately
communicate the risks to clients associated with the Enhanced
Variable Rate Fund (EVRF), the single premium life assurance bond
issued by US-based insurer AIG Life.


Estimated 250 customers

Coutts is the second major UK bank to be fined
by the FSA for giving inadequate advice to private banking

In October, Credit Suisse UK agreed to pay
£5.95m ($9.5m) to UK regulators for failures related to the sale of
structured capital at risk products (SCARPs) to private banking

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

, PBI reported as many as 250 of Coutts
customers may be affected holders of the AIG products.


Internal investigation

Coutts said the FSA did not make any findings
on the suitability of the advice given in any individual cases.

However, Coutts will undertake a past business
review of its sales of the product to address “the possibility
identified by the FSA that unsuitable advice may have been

This will be overseen by an independent third
party and will consider the advice given to customers invested in
the EVRF as at the date of its suspension on 15 September 2008.

Coutts has agreed to reimburse clients if they
are found to have been advised to purchase unsuitable products.

The bank said it is in the process of writing
to all affected customers with further details and an indication of
when the review will be complete.