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Advisers believe Santander advice review was “inevitable”

Santander 480

Advisers believe it was “only a matter of time” before Santander decided to review its investment advice offering, and predict the bank will pull out of mass market advice in favour of targeting high-net-worth customers.

Santander is carrying out a 90-day strategic review of its investment advice arm, with 880 jobs at risk. Staff were informed of the move at a meeting in Birmingham last week. Options under consideration include continuing to provide mass market advice, offering advice to affluent customers only and a complete closure of the advice arm.

Money Marketing understands Santander is being investigated by the FSA following a mystery shopping exercise into investment advice. The bank suspended its advice service in December.

Clearwater Financial Planning managing director Duncan Carter says: “This was always on the cards after Santander suspended its sales force. Given what the other banks have done in the mass market advice space, my take is it will probably tie up with another provider and focus on high-net-worth individuals.

“With the regulatory focus on risk assessment and capacity for loss, firms have to increasingly question whether a pure sales model actually works anymore.”

Page Russell director Tim Page says: “This has the air of inevitability about it. No bank is going to make advice work compliantly if it insists on using incentives and performance management measures in the way the banks have in the past. Santander may feel changing the culture in this way is too big a job, but it will be sad if Santander pulls out completely because there is a need for advice.”

Jacksons Wealth Management managing director Pete Matthew says: “It feels like it was only a matter of time before Santander would review its advice service. It is not that these big firms have decided they cannot make advice work post-RDR, but more that the world has changed and they do not want to change with it.

“Much as I do not like the banks, they do provide a service and it is sad to think what effect another bank pulling out of advice will have on the nation’s finances.”


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There is one comment at the moment, we would love to hear your opinion too.

  1. RDR has completely failed the people it was designed to protect, the average member of the public, and destroyed an industry in the process. The FSA should hang their heads in shame. The last act of an agency that has consistently failed the public.

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