FSA probes Coutts & Co after AIG bond sales

The Financial Services Authority (FSA) has launched an investigation into Coutts & Co over the sale of AIG bonds.

RBS has revealed as part of its interim results for 2010 that the investigation surrounds the sale by Coutts & Co of the AIG Premier Access Bond Enhanced Variable Rate fund between 2001 and 2008 as well as its subsequent review of those sales.

RBS Group and its subsidiaries are cooperating fully with this investigation.

Last year, Sir Keith Mills launched a series of adverts against Coutts’ AIG bond advice just outside its head office. (article continues below)

Mills, the founder of the Air Miles and Nectar loyalty programmes, paid for the campaign to show how Coutts told him that it was not concerned with any risk to investors such as him from AIG Life enhanced fund bonds.

On Coutts’ advice, in December 2007 Mills purchased £65m of AIG Life’s premier bonds backed by its Enhanced fund, which were recommended by Coutts as a low-risk, easy-access investment and an alternative to bank and building society deposits.