If you go down to your bank today…
There is a big shake-up occurring with the way in which banks and building societies are providing financial advice and sales to their customers.
Last week we heard that Barclays were closing their retail financial advice arm, with the loss of 1,000 jobs.
It means that Barclays will no longer be offering financial advice or sales to their branch customers, with plans instead to deliver these services online in the future.
This week we have heard that N&P (Norwich & Peterborough Building Society) have signed an ‘introducer partnership’ agreement with Aviva.
This means that N&P customers who seek financial advice through a branch will now be introduced to an Aviva representative based within the branch network. The Aviva representative will only be able to offer advice or sell products from the very limited range of Aviva products.
N&P had been providing independent financial advice to their customers since 2003. They have over 17,000 customers, so this change from independent financial advice to tied ‘advice’ is a big move.
With the implementation of the Retail Distribution Review (RDR) at the end of next year, banks will come under exactly the same set of rules as IFAs when it comes to the provision of financial advice. This means that their ‘advisers’ will need to be professionally qualified and work on a transparent remuneration basis.
Whilst some IFAs have feared that the RDR will hand the banks a competitive advantage, we believe that more banks will choose to abandon their customers before the end of next year, rather than raise their standards to meet the new regulatory requirements.
Photo credit: Flickr/ell brown