Barclays to close advice arm
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Barclays is closing its advice arm, Barclays Financial Planning, and exiting the advice market for retail consumers, Money Marketing can reveal.
The bank will continue to offer advice to high-net-worth clients through Barclays Wealth, but will no longer give retail clients advice through its branch network.
Barclays Stockbrokers, which offers an execution-only service, will not be affected by the move.
The bank is instead looking to develop an online execution-only service for mass market clients.
A Barclays spokeswoman says the bank conducted a review of its financial planning arm and concluded the business is no longer viable. Staff are being informed of the news this morning.
She says: “There has been a decline in the commercial viability for financial planning services over recent years and our expectation is that this will continue.
“Our decision to exit the market is not a direct result of the RDR, but we do anticipate that the outcome of the RDR may have an impact on the performance of the business.
“An internal review has been going on over recent months and we have concluded that given the changes to the retail investment marketplace, it is unlikely that this business will be able to deliver a return to justify the investment that is needed.”
Barclays says its move to an online execution-only service follows market trends.
The spokeswoman says: “We are seeing really strong trends amongst consumers to actually purchase and manage investments online and we are expecting this to increase steadily. This is contributing to why we want to offer retail investment services online. There will be further announcements about the online proposition early in 2011.”
Barclays says it will refer clients who require financial advice to IFA Promotions or the Consumer Financial Education Body’s website, Money Made Clear, which was established by the FSA to provide “practical money management advice and tools”.
There are thought to be around 1,000 staff within Barclays Financial Planning and they will all be placed on a six-month consultation.
Barclays says it will also consult with Unite during the consultation process.
Last week, the FSA fined Barclays £7.7m for failures relating to the sale of the Aviva global balanced income fund and the global cautious income fund, which were first exposed by Money Marketing in April 2009.
The FSA says Barclays is facing a further compensation bill of up to £42m, on top of the £17m it has already paid out to investors.
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Readers' comments (51)
Kevin Smith | 26 Jan 2011 10:08 am
Wow! Just Wow! I used to work with these guys when they were tied to one provider and was a major point of contact. Hope everyone I used to deal with has already left and set up businesses on their own already with their clients, or have somewhere else to go if they haven't!
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Dominic Thomas | 26 Jan 2011 10:09 am
So all those moaning that the fine was not enough... presumably it was.
Now for some reflection on how a multinational business cannot find sufficient profit in providing advice to UK retail clients and the implications for us all.
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John Hutton | 26 Jan 2011 10:11 am
Barclays...it is gonna be a ghost town!
Will the rest of the rubbish follow this strategy?
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Ancient Wisdom...is a mortgage broker in N3 | 26 Jan 2011 10:14 am
Barclays must have realised the cost of being financial advisers.Since the recent huge misselling fine, and bad reputation, consumers should be ever more cautious then getting advice through poorly qualified high street bank advisers who are not wholly independent.
RDR in 2013 will cause networks to fail as well and more advisers will exit.
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Mr Smug | 26 Jan 2011 10:14 am
Here's a warning to us all...
"There has been a decline in the commercial viability for financial planning services over recent years and our expectation is that this will continue".
FSA please listen - if Barclays can't make your regulations work commercially - no-one can.
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Anonymous | 26 Jan 2011 10:16 am
So what exactly has the FSA achieved in its plan to deliver cheap financial planning advice to average man on the street? Answer - bancassurance/IFA business models that only work dealing with the affluent. End Result - online execution only for those that need advice the most. FSA = destructive not constructive. Oh dear.
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John Hutton | 26 Jan 2011 10:17 am
So what are they going to do when a "customer" asks "What should I do with this investment you sold me?" in the future? No service/ No advice?
Oh no change there then!!!
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Dave King | 26 Jan 2011 10:19 am
Big was beautiful when they could get away with the non ethical way of selling, but maybe they're now frightened that they can't make the fast irresponsible bucks from the general public without giving TCF advice! Here's hoping some more of the banks follow!
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Duncan Jones | 26 Jan 2011 10:22 am
Barclays are to be applauded in making this decision although the recent FSA fine will have no doubt hastened it. It will be interesting to see how the others banks respond as I would expect the same cost/benefit analysis by Barclays will translate
to the others.The provision of financial advice is (and always has been) a serious business and this is at last dawning on those who have caused the most consumer detriment.Could decisions like this together with the prospect of banning execution only
and higher qualifications finally make the transition process worthwhile ? Are we in the darkness before the dawn?
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Andy Pandy | 26 Jan 2011 10:26 am
Good grief, never expected this! If other banks follow suit where will people go? IFA's? You'll be able to count IFA's on your fingers and toes soon!
Great work FSA. At a time when well paying jobs are hard to come back you just keep carrying on.
Massive protection, pension and savings shortfalls anyone?
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