Staff letters opened at HSBC

ALL post sent to staff at HSBC Investment Management is now opened by its compliance department before being distributed, Financial Mail has learned.

The move follows a spate of complaints from clients about poor performance and administration at the division, formerly known as James Capel.

Auditor KPMG is already holding an investigation into the division. It is believed that this was prompted by a request from the Financial Services Authority.

Three funds managed by the division, including HSBC Select Opportunity and HSBC Market Neutral, were closed because they had performed so badly.

Insiders claim that letters are now delivered at lunchtime and are stamped to show that they have been read by the compliance department.

One said: 'It is a very difficult situation. How can you deal with clients before lunchtime if you haven't been able to read their correspondence?'

HSBC confirmed that all post for the investment management operation is opened before being passed to fund managers, but denied it was read by the compliance department. He added that all post to HSBC's private bank and asset management division is also opened centrally.

It is believed that all compliance procedures have been tightened up within HSBC Investment Management. The division has recruited more compliance officers and has introduced a backup control operation.

It has also rehired a former employee, Patrick Wallace, to head a complaints desk.