Few will get financial advice from Banks due to RDR
As I had posted earlier today that Nationwide, the largest Building Society in Britain (by miles) has suspended its pension advice (as the one pension that they sell, er I mean advise (Legal & General) is not compliant with the new adviser charging rules) it is only fair to outline what the other banks are planning. Very few people will be able to get financial advice from banks, if anything more people will find the restricted offering is likely to lead to increased focus on product pushing by Banks. We shall have to see.
Barclays withdrew their “financial planning” services in January last year. They do offer advice to their more wealthy customers under the Barclays Wealth label.
Lloyds has ceased providing advice to anyone with less than £100,000.
RBS will be offering restricted advice, having cut its number of advisers in half.
Santander has had to suspend its 800 or so advisers from further investment advice as they are concerned that their advisers are not adequately trained. Santander have previously stated that they will offer restricted advice (their own products) to anyone with £25,000 or more.
Why? because compliantly providing financial advice is very expensive. Providing proper financial planning advice is even more expensive as it involves two limited resources – time and expertise. This was outlined several years ago (and repeatedly ever since) by Ernst & Young who warned Banks to change their business model and that the hourly rate would need to be at least £200, which clearly for a standard bank customer is unlikely to be workable.