Where am I? 
Home Protection Long Term Care
HSBC encouraged bank staff to refer customers to the Nursing Home Fees Agency (NHFA), according to an alleged training video.
The bank was fined a record £10.5m in December for mis-selling investment bonds to elderly customers.
A statement released by HSBC at the time claimed the NHFA advisers were separately authorised and advised only "a small number of customers on structuring their finances to meet ongoing care costs".
However, the video, seen by IFAonline and allegedly sent to HSBC branch staff after the bank purchased NHFA in 2005, appears to show how to refer children of elderly clients to the care home specialist.
In the video, the then-general manger of Premier and Wealth Irene Dorner - now CEO of HSBC's US arm - says "the future of care is HSBC... with the cost of care about to quadruple in the next 20 years, you'll see how important it is. We at HSBC are in the perfect position in the market to benefit from this because we now have the market leader within the group."
It is followed by a role-playing scenario, apparently set in an HSBC branch, where a woman wearing a HSBC name badge questions a customer on a large lump sum recently deposited in his account.
When the man replies it was from the sale of his deceased father's house, the employee suggests contacting NHFA for advice on how to pay the care fees of his elderly mother.
NHFA's then business development director Diana Roberts also appears, telling viewers how to source leads for NHFA.
"The first source will be the enduring power of attorney accounts," she says. "If someone is acting as an attorney for someone, that person is definitely in need of care. If you're not able to manage your finances you need care.
"The second source is people between the ages of 45 and 70. They are children who have parents or even grandparents who need long term care. No-one should be afraid to open the subject with them - because often people are desperate for advice."
A HSBC spokesperson said the video did not necessarily contradict the bank's previous position.
"That was the avenue that we sent people to if they wanted long term care," he said. "The company was bought to provide long term care, so we would refer them to NHFA as IFAs. We needed to let our staff know about the facility they offered."
Last month IFAonline reported that NHFA staff were allowed into branches to meet HSBC customers.
Former NHFA adviser Tom Scott said: "I used to see clients in HSBC branches, and in joint meetings with HSBC staff. It was a very strange relationship, and I have no idea why they ran it in the way they did."
| Share | |
| Comment | Senior HSBC boss praises NHFA in leaked ‘training video’ |
More long term care news
Email alerts
Recommended reading
Categories
Topics
Comments
Don't shoot the messenger
Graham is absolutely right. The FSA fine the banks because it's easy and it pays their bonuses (eh Hector?). They refuse to get to grips with the root problem that Graham identifies because it's not in heir best interests to do so
Posted by: Neil Shillito
What deal has been done?
The more that comes out about this the stinkier it becomes. Anyone who does long term care cases will know that it takes months and sometimes years to complete a single case and almost all are through powers of attorney. So the idea that HSBC originally gave of a group of out of control, commission hungry advisers, running round flogging bonds to old ladies was completely wrong. Why would they do that? I can only think that it was because they had a lot of nasty bank misselling to old ladies and discrediting NHFA was an easy distraction. "It wasn't us gov, it was this rogue company we bought and forgot to supervise". The real fear is that the FSA was somehow in on this 'deal'. HSBC must be concerned that after three months this story still hasn't gone away. That is because the truth has yet to come out.
Posted by: Tricia Yates
Working Together
HSBC's position is untenable. Either they had done their due diligence, had continued compliance monitoring and were satisfied with the advice that NHFA was giving in which case why are they so keen to distance themselves now? Alternatively they allowed a group of unchecked advisers to see their most vulnerable clients without any due diligence or compliance monitoring and let those people think that NHFA was part of the bank. In which case I believe a fine of £10.5m is way to small. Whichever way you look at this it appears that HSBC has acted appallingly.
Posted by: Soren Lorenson
Crime and punishment
It does seem amazing that the directors of large financial institutions never get punished; it is always the shareholders or the members who pay the price, e.g. Norwich and Peterborough Building Society, driven on to the rocks with all the alacrity of an Italian cruise liner, yet who paid the fines the CEO and his cronies, no the poor old members of this fine old mutual, truly amazing ripped off on shoddy sales by the society you belong to and then you have to pay the fines as well.
Posted by: Mervyn
NHFA affair
Their is only one way to rid Financial Services of wholesale mal-practice as exemplified by the NHSA affair - and it's not fining the 'bank'. The first step is to get rid of a regulator that is in awe of the banks - indeed, little more than a puppet for them. The second step is is put those responsible (the people on the ivory towers rather than to foot soldiers) behind bars. Will it ever happen ? Too many vested interests and snouts in the trough ! So let's castrate IFAs instead.
Posted by: Bill Wells
Conspiracy or Incompetence?
Tricia Yates covers some very interesting points. She is obviously an x NHFA adviser too. Insider knowledge can be a great thing and there is more to this than HSBC and the FSA would like us to know. For instance, I believe it was HSBC compliance that approached the FSA with their “concerns” about NHFA, when the FSA had never spotted anything wrong on earlier visits to NHFA. It is interesting that Jo Phillips Senior Compliance Manager HSBC once worked for the FSA as an Associate/Forensic Investigator. Read into this what you like, but maybe that is another piece of this complicated jigsaw. Tricia’s conspiracy theory may be correct and HSBC probably view a fine of £10.5m and £30m compensation as a good investment! I hope the real rogues in this saga eventually get found out.
Posted by: xNHFA adviser
@Bill Wells
Hi Bill, You talk about NHFA malpractice but that is the really interesting thing about NHFA. There wasn't any significant malpractice - the advice given was broadly correct. The clients were happy. Most did pretty well out of the advice. Some lost, but only as a result of falling markets of which they were aware. xNHFA adviser states that HSBC told the regulator that there was a problem. Why would they do that when there wasn't one. Either they are incompetent and didn't understand the advice their subsidiary was giving OR they had something much much bigger to hide.
Posted by: Tricia Yates
NHFA clients
This sad affair shouldn't be allowed to go away at all. There us so much more to this story and the FSA should be looking into it in far more detail. I have read the statements put out by HSBC and the press and can tear apart the vast majority of what has been said about us. Clients who are now receiving compensation are mystified as to why it is happening as they were indeed happy with the advice they were given. It would be interesting to see published how many actual complaints there have been following the announcement of our so called mis-selling and how many of those are justified. I know how few there were before......far less than a lot of IFAs and certainly less than any bank!
Posted by: Ex NHFA adviser
Confused clients
I had a client call me last week. She had received compensation from HSBC and couldn't understand why. Her investments had made her money and she was quite happy that she had done the right thing. She was so honest that she wanted to send the money back! This exercise is quite disturbing for a lot of people who were happy (rightly) with what was done for them. The FSA has made a big mistake with this case (IMHO) and as a transparent and accountable regulator (really) should go back and see what has really gone on.
Posted by: Tricia Yates
Related articles
Most Read
Audio / Visual
With the industry's biggest fund managers, IFAonline welcomes you to the media centre.
This year we have 14 awards designed to mark out the very best products in a highly competitive and innovative market. This includes three new awards for 2011 to reflect the developments in this rapidly growing market: Best Dual/Multi-Index Product, Best Structured (Oeic) Fund and Best Structured Product Provider.
Events
Poll
|
|
Job search
Ifaonlinejobs will open the right investment career path for you. Search hundreds of vacancies on www.ifaonlinejobs.co.uk now
In Focus
Two months left before the ‘real RDR deadline’ – are you compliant with the required professional...
Viewpoints
With the debate surrounding funding long term care in the run up to the last general election...
sponsored by
And it will be ever thus ..
Until Sants imposes personal fines on Directors of Banks these bad practices will continue. Directors on Boards need constant 'results' which in simple english means 'more sales year on year'. However, sometimes this may not be possible, so in times of famine Directors impose harsh targets on bank branch staff who then have to resort to unethical practices to obtain the business to keep the Board room happy and keep the gravy of big Director bonuses flowing. Unfortunatly, the lower ranking staff get criticised.How about asking WHO set the targets and WHO made the business decisions in the 1st place ?
Posted by: Graham