The Royal Banks of Scotland’s plans to replace advisers with an automated service - criticised for making advice more exclusive by union Unite - is simply one solution to the “difficult” advice gap problem, an industry expert has said.
Earlier this week, RBS announced it was launching a new online platform to give robo-advice, in order to provide a cheaper service for those with fewer assets.
From June, RBS and Natwest will no longer be offering face-to-face investment advice for customers with assets of less than £250,000. It will also be scrapping face-to-face protection advice completely, offering it only over the telephone.
Rob MacGregor, national finance officer at Unite, dismissed the bank’s claims that the plans would make advice more affordable.
“Rather than making advice more affordable, they are making it more exclusive,” he said. “What we’re seeing is a two-tier advice service. Most customers will now only get online or telephone advice, unless you happen to have in excess of £250,000 to invest.”
He also said recent online banking crashes meant people would not trust automated advice systems from banks. “When it comes to machines versus people, it is undoubtedly the case that dealing with online forms and automated voices is far more frustrating for customers.
“The spate of recent IT glitches across the banks, including RBS, shows how fallible this service would be.”
Adviser view:
Darius McDermott, managing director of Chelsea Financial Services, said providing people with lower amounts of savings with face-to-face advice was “difficult” and RBS is merely offering a solution.
“There is a two-tier advice [service], and you do need that sort of sum [£250,000] before it is viable to take that sort of financial advice. Advisers have a huge regulatory burden and they have to do a lot of work when giving advice,” he said, adding that robo-advice is one of the solutions trying to fill that gap.
