In a settlement agreement with the British Columbia Securities Commission, HSBC Investment Funds (Canada) Inc. (HIFC) and HSBC Private Wealth Services (Canada) Inc. (HPWS) have agreed they charged excess fees in some client accounts.
HIFC has a policy to advise clients when their account holdings in an HSBC Mutual Fund qualify for its lower-priced Premium Series investment funds. Due to inadequate controls and supervision, it didn’t apply this policy consistently, which resulted in some clients paying extra fees.
HPWS has a policy to exclude client controlled securities when calculating advisory fees on client accounts. It didn’t apply this policy consistently, which resulted in a small number of clients paying extra fees.
The agreement notes that HIFC and HPWS cooperated fully with BCSC staff over the course of their review and were quick to implement a compensation plan. To address the failures, HIFC has compensated 4,651 client accounts for a total of $7,076,651.35, and HPWS has compensated 10 client accounts for a total of $10,100.84.
HIFC and HPWS have paid the BCSC $300,000 in respect of the settlement of this matter, and $20,000 in respect of costs.