With the news that another one of our clients has decided to "drink the HSBC Kool-Aid" (as in the Jonestown Massacre in 1978) we are starting to wonder whether HSBC will suffer the same fate as Barclays did in the mid 90's when they were vilified for their investment in South Africa.
When HSBC decided to create a legal panel of a small number of low-cost providers of conveyancing services, this caused much gnashing of solicitor's teeth. Naturally, this gnashing sound is being heard by estate agents who are now suggesting that if clients use HSBC for their mortgage, then they will be forced to use a law firm that the bank dictates.
Indeed, in a recent scenario, HSBC persuaded one of our clients that we had mislead them over our suggestion that using separate representation would cost more and that by using their solicitor it would be cheaper.
Given that HSBC has created this doubt in our client's mind, our previously ambivalent position towards them has changed. We now suggest to agents and clients that if you're looking for a lender and want to choose your own representation, then HSBC should be avoided.
It took Barclays years to overcome the prejudice that they suffered - we wonder whether HSBC will heed this warning from history and consider the damage that this decision may have on their business.
