HSBC estimates that the amount of compensation to be paid to NHFA customers will be approximately GBP29.3m in addition to the fine.
FSA said that NHFA advised 2,485 customers to invest in asset-backed investment products, typically investment bonds, to fund long-term care costs for elderly customers between 2005 and 2010.
The products typically had a five-year investment period but many of the customers had a life expectancy of less than that period and the average age of the people buying these products was 83.
FSA added that a review by a third party of a sample of customer files found unsuitable sales had been made to 87% of customers involving these types of investments.
HSBC agreed to settle at an early stage entitling it to a 30% discount on its fine and also demonstrated its commitment to making changes to its operations.
FSA acting director of enforcement and financial crime Tracey McDermott said that NHFA was trusted by its vulnerable and elderly customers. It breached that trust to sell them unsuitable products. This type of behaviour undermines confidence in the financial services sector.
