Santander to reinstate branch-based advice

Santander to reinstate branch-based advice

Santander UK has stated that from March it will once again offer branch-based investment advice.

The announcement of the return to mass market investment advice came two years after Santander was hit with one of the UK’s biggest-ever retail banking penalties, of £12.4m, for giving customers unsuitable advice. The bank announced the closure of its bancassurance division in February 2013 after the FSA found serious failings in the way the bank assessed customers’ risk appetites.

Santander plans to have 225 advisers across the country by the end of March. The bank already has 200 investment advisers in place, and it has been recruiting and building this up over the last few months. It will be adding a further 25 over the course of the first quarter.

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Advice fees will be 2.5 per cent of the amount invested, with a minimum investment of £500 and a maximum of £150,000.

Other high street banks stated they will not yet follow Santander and RBS’ lead but confirmed they have a return to offering investment advice in view. A spokesman for Lloyds Bank said: “We do not offer investment advice in branches but our products and services are continually under review.”

A Barclays spokesman said that the bank had stopped providing financial advice regarding investment decisions to its retail customers in 2011. However, its wealth and investment management business does provide advice to high net-worth clients.

A spokesman for RBS stated it would continue to offer advice to those with £100,000 or more.

Santander’s return to investment advice came after Personal Finance Society chief executive Keith Richard said several big institutions would return to offering investment advice this year.

He said: “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.

“We also need to better assist the public with a return to a healthier savings culture, but the current regulatory framework increasingly pushes regulated advice towards those who have already accumulated wealth.”

Adviser view

Chris Hannant, director general at the Association of Professional Financial Advisers said: “The Financial Advice Market Review shows there is a clear need for more advice, planning and people managing their own investments.

“The pension freedoms have put greater responsibility on individuals to manage their finances. The more that taking an adviser and seeking financial advice becomes the new normal, the better that will be for the sector as a whole.”