RegulationFeb 13 2013

Santander closes advice arm as FSA investigates failings

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Santander is closing its bancassurance division to new business as it re-evaluates its advice offering, Santander has told FTAdviser.

A Santander UK plc spokesperson said that it will be working closely with other business areas to ensure that many of those who may be impacted are able to secure roles in a growing Santander Group.

A spokesperson for the Santander said: “There is never a good time to announce changes such as this and we are acutely aware of the uncertainty staff are facing.

“We are working closely with other business areas to ensure that many of those who may be impacted are able to secure roles in a growing Santander Group.”

The news comes as the Financial Services Authority enforcement division investigates the bank in relation to failures of the advice offered to its customers.

Earlier today (13 February), the FSA published the results of a mystery shopping exercise conducted last year, in which it found that roughly a quarter of financial advice given by retail banks and building societies was unsuitable.

In its report the FSA said of the six major firms which fell within the scope of the exercise, one was under enforcement investigation as a result of its findings.

Sources close to the situation confirmed that Santander is the bank in question.

In relation to the FSA investigation, a spokesperson said: “Santander will continue to review how it can offer advice to its customers in the future for their benefit and provide access to appropriate investment products. Santander will explore all options, given its heritage, its customer base, and the importance of access to assistance and advice for all UK consumers in protecting their financial well-being.

“We are considering the findings in the context of the significant actions we took in 2012 to prepare for the post-RDR world. We continue to believe it is important to offer customers access to a broad range of financial products which are suitable to their needs and individual situations, and we are working towards that objective.”

Commenting on the results of the mystery shopping exercise, the British Bankers’ Association said: “We welcome this review which shows that the majority of clients received good advice from their banks, but clearly more can be done.

“Any examples of advisers failing to gather enough information on their customers and not recommending the right products are unacceptable. This review will help all banks to focus on retraining staff and changing processes to improve standards for customers in the future.”