HELSINKI, March 8 (Xinhua) -- The Finnish Financial Supervisory Authority has hit hard four financial enterprises for sloppy advice to customers in old age, media reported on Wednesday.
The highest penalty, one million euros (1.05 million U.S. dollars), was levied on Nordea Bank. The sum is the largest the authority can demand.
The Helsinki Region Cooperative Bank had to pay 400,000 euros. Two other companies paid lesser fees.
The institutions did not check the investing experience of their clients, as required by the law. Documentation of advice given was also insufficient.
The investigation focused on financial advice targeting those over 70 years old in 2015. In one case, a 90-year-old Nordea customer sold his two million euro investments and purchased Nordea instruments. The transaction caused a 100,000-euro tax that the customer did not know in advance.
Harri Vanska, analyst of the leading Finnish business daily Kauppalehti, said the public admonishment and major fines were humiliating to the financial institutions concerned.
The public supervisors took seriously the letters-to-the editor the next of kin of seniors had written about the way their family members had been targeted by bank marketing.
"The investigation was important, as the share of seniors is increasing. The officials have now officially confirmed the complicated structuralized investment products are not suitable to seniors," Vanska said.
Sonja Lohse, an official at the supervisory authority, told national broadcaster Yle that the penalty for Nordea Bank was higher as there had been a situation of conflict of interest in their services.
"The bank systems had consistently suggested to customers that they should sell all their investments and put their money into products that the bank or its partners were offering. The Finnish law prescribes that conflicts of interest in financial advice should be prevented," said Lohse.
Both Nordea Bank and the Helsinki Cooperative Bank said corrective measures have been adopted and staff training increased.
In the Finnish control system, the fines levied by the supervisory authority on a bank will be paid to the state, not to any customers. The banks can file complaints in 30 days.
The Cooperative Bank said it will not complain, whereas Nordea did not comment. (1 euro = 1.05 U.S. dollars)
