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Banks to chase IFA clients, BBA

In an interview with FTAdviser, Peter Tyler, policy director of the BBA, said banks would increasingly be chasing those who could afford more costly advice post-2012 due to the costs of the new adviser charging regime.

He said banks would continue to offer a range of advice services – tied, multi-tied and independent financial advice.

However, he said the cost of systems changes and training means banks would need to attract high net worth clients.

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Mr Tyler said: “There is a broad consensus in the industry that advice will increasingly be targeted at those that are more able to pay – the wealthier clients.

“I think that will be the same for both bank advisers and IFAs too because the Retail Distribution Review does come with a cost, some quite significant cost.

“Professional standards and adviser charging and the other systems changes, regulatory changes broader than that, will definitely lead to a higher cost to provide advice and that will inevitably, unfortunately, feed through to customers.”

Mr Tyler also said that banks would likely not offer simplified advice models at the outset of 2013, as the regulator’s guidance in this area was not yet finalised and there was little in the current offering to “encourage banks to bring these services to market”.

To see FTAdviser’s interview with Mr Tyler, click here.