Royal Bank of Scotland is set to augment its mass market retail investment advice this year, the bank confirmed to FTAdviser today (5 January).
Speaking to FTAdviser, a spokesperson for RBS said: “After Retail Distribution Review we have offered investment advice to our customers with more than £100,000 to invest, though those customers with less than £500,000 we have temporarily restricted our offering as we further develop our proposition.
“We expect these developments to be completed later this year to enable us to better serve our customers.”
This morning, it was announced Santander UK plans to restart branch-based investment advice two years after it was hit with one of the biggest ever retail banking penalties for giving unsuitable advice to customers.
Santander announced the closure of its bancassurance division in February 2013 after the Financial Services Authority found serious failings in the way the bank assessed customers’ risk appetite.
A spokesman for Santander told FTAdviser that advice fees will be 2.5 per cent of the amount invested, with a minimum investment of £500 and a maximum of £150,000. The face-to-face service will be made available to those with investable assets of over 50,000.
A year ago the bank started offering advice at some branches on a pilot basis, building up a team of around 200 advisers, with the aim of having 225 in place for a full launch in March.
“We wouldn’t rule out robo-advice, but at this point we’re focusing on face-to-face in branch, linking to the platform,” stated the spokesman, referring to the FNZ-backed investment platform also being launched to catch more of the mass market.
Other banks FTAdviser spoke today stated they not yet following suit, but have a return to offering investment advice under review.
A spokesperson for Lloyds Bank said: “We do not offer investment advice in branches, but our products and services are continually under review.
“However, we do offer an advice service for Private Banking clients on their investments. To take advantage of the service, you need to have at least £250,000 in savings and investments or a sole annual income of at least £100,000.”
A spokesperson for Barclays said that there was nothing further to add since the bank stopped providing financial advice regarding investment decisions to its retail customers in 2011.
However, the spokesman added that its wealth and investment management business does provide advice to high net worth and ultra high net worth clients.
Keith Richards, chief executive at the Personal Finance Society, commented that subject to the findings of the Financial Advice Market Review - expected to be announced by the chancellor in April - it is possible that some much-needed regulatory reforms will be introduced to support the government’s objective of increasing access to regulated advice.
He stated that this might also mean that a number of other big institutions would to re-enter the advice sector as they have the resource to build expediently on a national basis.
“Whether or not the big brands can be trusted to learn from past failings and get it right this time, will no doubt polarise views.
“Pension freedoms have created demand for advice from consumers who would not have otherwise sought it and we are likely to reach capacity over the next few years unless action is taken.”
Chris Hannant, director general at the Association of Professional Financial Advisers, agreed that the FAMR has demonstrated a clear need for more advice, planning and people managing their investments.
“Pension freedoms have put greater responsibility on individuals to manage their finances. The more taking an adviser and seeking financial advice becomes the new normal, the more that will be good for the sector as a whole.”
This article was revised on January 5, 2016, after RBS confirmed that its initial press statement to FTAdviser, on which the original was based, was inaccurate.
