Pay up!

Barclays has been hit with a fine of £7.7m by the financial regulator and ordered to pay out up to £60m in compensation to its customers.

The Financial Services Authority (FSA) has penalised the bank for giving bad investment advice on two of its funds.

The bank sold Aviva's Global Balanced Income Fund and Global Cautious Income Fund to 12,331 people between July 2006 and November 2008.

The FSA said more than 1,700 people, most of whom were retired or nearing retirement, complained about advice the company gave to invest in the funds.

The failings identified included the way risks were explained to customers and staff, and not ensuring the funds matched investors' objectives.

FSA head of financial crime Margaret Cole said: ‘When recommending investment products, firms should take account of a customer's financial circumstances, their attitude to risk and what they hope to achieve by investing.

‘On this occasion however, Barclays failed to do this and thousands of investors, many of whom were seeking to invest their retirement savings, have suffered.

‘To compound matters, Barclays failed to take effective action when it detected the failings at an early stage.’

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