HSBC has moved to bridge the advice gap by introducing a face-to-face stand-alone proposition.
The service is aimed at individuals with between £15,000 and £100,000 to invest and offers a discount to those who do not wish to receive full financial advice. HSBC Premier Financial Advice is available at £420 as a report-only fee, compared to £294 for stand-alone advice. It will initially be rolled-out across the UK for customers who hold £50k or more in savings and investments.
Caroline Connellan, HSBCs head of UK Wealth and Premier, said, “We believe it will help more customers make important financial decisions for themselves and their families and help them achieve their financial goals.”
Alistair Cunningham, financial planning director at Wingate, felt that stand-alone advice may not be in the best interests of the customer. He said, “Advice, by its nature, should be holistic by default. It’s actually very hard to be sure that, without a full understanding of all of a client’s affairs, other aspects will not be affected. HSBC are actually likely to be selling product – they are offering a restricted range of outcomes and I would not classify it as advice.”
Research by the bank concluded that, of the investments made to date in 2016, 68 per cent were arranged without financial consultation, 51 per cent of potential investors were unlikely to seek advice and 23 per cent felt it was “too expensive”.
Further data showed financial advisers are still the most popular source for advice, with 36 per cent selecting this route, compared with 24 per cent and 15 per cent choosing banks and building societies respectively.
But Mr Cunningham is not entirely confident the banking culture will change after previous issues, “I would like to think that banks have learnt their lesson. However, I’m the eternal cynic and can see another raft of compensation and sales targets leading to poor investments being recommended. This is not unique to HSBC but historically endemic in banks.”
