Kerry Lee, director of Independent Wealth Management Consultants, said she had experienced difficulty getting business accounts with several UK banks.
She told FTAdviser: "Banks are writing to IFA firms informing them they must move their bank accounts with little notice given or they will be closed.
"Having contacted alternative banks for facilities nearly all are taking the same stance that they will not offer banking facilities to companies registered with the Financial Conduct Authority, but no further explanation."
IWMC said Barclays had written to them last year, giving them eight weeks' notice that the company's account was to be closed "due to 2019 ring-fencing legislation to provide banking to business below £6.5m turnover".
Yvonne Cooper, director of IWMC, said the firm had banked with Barclays for more than 20 years.
A Barclays spokesperson said: “Due to client confidentiality, we are unable to discuss this matter with you but Barclays is complying with its legal and regulatory obligations.”
Cooper started researching alternative banks but found excessive delays in responses as well as flat refusals to take on their business accounts.
Business banking services should be assisting financial advisers to protect their own organisations from damage, disaster and against bad debts. -- Keith Richards Cooper said: "After this, I went back to Barclays to express our dissatisfaction, as we appear to be in a situation where we cannot find alternative banking within the timescale. They have given us an extension to June 2021 to find and alternative.
"As you can imagine, we are currently in state of "limbo" not actually knowing what we can do and have our "fingers crossed" that TSB or NatWest will come to the rescue."
IWMC provided a breakdown of approaches it has made to several banks, which can be seen in the box-out below.
Barclays does provide banking services to FCA-regulated companies, such as advice firms, and to insurance companies.
A spokesperson for HSBC said: "HSBC does support FCA regulated companies; new business account applications from IFAs are reviewed on a case by case basis to determine eligibility.”
Martin Strong, a mortgage specialist and financial adviser for Strong Mortgage Solutions, said he had tried to set up a limited company bank account, as he created a new business in July last year and was "growing under the current climate".
He told FTAdviser: "I was struggling to set up an account with Starling Bank a few weeks ago and one of my SIC codes was not accepted by them.
"I asked them over the webchat if I took it off, would I have an issue - and they told me 'no'. This cost me £13 to update Companies House, which is not a problem, but after the application went through they came back and declined my case.
"I spoke to them as I would not give up without an answer from them. They told me it was to do with selling insurance as this is an area they do not allow, it is in the Terms and Conditions.
"It is frustrating as all mortgage brokers sell insurance due to the nature of the job, or have access to this area at least. It looks like they will accept me for a bank account if I do half the job and risk not giving full advice and recommendation."
Keith Richards, chief executive of the Personal Finance Society, said: “Financial advisers play a vital role in improving the financial resilience of their clients and will be key to addressing vulnerability and supporting the nation’s bounce back from the pandemic.
"Business banking services should be assisting financial advisers to protect their own organisations from damage, disaster and against bad debts.
“Covid-19 means the help that financial advisers can offer their clients with money matters is needed more than ever. Our members have viable businesses that warrant every bank’s attention.”
The issue was first raised on February 11, when Charlotte Wood, director of Rosewood Financial Planning, tweeted an exchange between herself and Starling Bank.
She said she was declined a business account with the start-up bank, despite her family all having personal accounts with Starling Bank.
But a spokesman for Starling Bank said the rejections were actually because the accounts they have do not currently meet all the needs of the businesses applying for accounts.
The spokesperson said: "We’re seeing growing numbers of applications for our free business current account from complex businesses, including from regulated financial services businesses that move client money through their accounts.
"Our accounts do not meet all the needs of all of these businesses, so we cannot accept applications from them at present.
"We’re putting in place the appropriate services for client money accounts as well as enhanced onboarding and other checks that will allow us to widen the scope of who we can provide banking services to."
simoney.kyriakou@ft.com
Have you been denied a business account, or told to change providers recently without warning? Contact FTAdviser at FTALetters@ft.com
