Aviva axes direct advice arm


Aviva is to stop offering face-to-face investment and protection advice for its customers from 31 May.

The move, which comes as part of the 2,000 job cuts announced by the insurer last week, will affect approximately 120 advisers, most of whom are field-based.
Around 10 adviser roles will be retained to look after existing customers.
The announcement will see Coventry Building Society, which has a bancassurance partnership in place with Aviva for investment and protection advice, pull out from offering investment advice to its customers.

A total of 20 Aviva advisers are currently based with the Coventry branch network. The building society’s mortgage advisers will continue to offer Aviva protection products under a single-tie deal.
Aviva says the move has been prompted by consumer demand, which is for internet and telephone-based services rather than a full face-to-face advice service.
Staff within the direct sales force were informed of the closure yesterday.
An Aviva spokesman says: “We have previously outlined plans to reduce our expenditure to improve our position as a business. This has meant we have been reviewing how we can meet our customers’ needs in the most cost-effective way.
“As a result we can confirm that as of 31 May, Aviva will no longer offer fully advised sales to new customers across all life products.
“We remain fully committed to supporting all our customers and we will continue to offer products and services through our non-advised direct team and via our distributors, including our broad network of independent financial advisers.” 


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There are 37 comments at the moment, we would love to hear your opinion too.

  1. I winder if anyone at the FCA can see the bottom of the pit or indeed if anyone at the FCA really cares.

    I suppose they will if they start to lose their jobs, as ultimately it will reach them.

  2. Jeez another 120 bite the dust! How many is that now since the RDR was announced? Anyone have any ideas? I dont know about you but up to now my firm hasnt seen any increase in demand for advice from all these clients (must be 10s if not 100’s of thousands) out there who have lost there adviser (whether it be a bank adviser or other)?! I blame this on the way adviser charging has been explained to the population in that it would appear that, ‘all of a sudden financial advisers were going to need paying for the service they provide’!! No mention of the fact that they were already being paid and ‘you-the client’ was paying for the advice through additional costs within your plan to cover any commission payment.

  3. Is MM keeping a tally of the RDR job losses to date.

    Last estimate I saw was that 44% of bancassurers had lost their jobs.

    But there is silence from MP’s about this.

    Imagine if a piece of Quango regulation had resulted in 44% of car workers loosing their jobs?

    Why are financial advisers treated like this? The people who have lost their jobs here have lives, loves and families to support too. Stop treating us like dirt.

  4. And another nail in the coffin for man in the street advice. Oh what a tangled web we weave. RDR really has helped the consumer

  5. We this decline in the UK advice market ever end? The FSA and now their mirror image the FCA have destroyed beyond belief a market at a cost of billions that only required small changes.

  6. There has been an increase in demand for internet or telephone business but this is not the real reason. The fact is that under the costs incurred by RDR they cannot afford to sustain a direct sales force. As a small IFA dealing in mainly protection I have seen a increase in enquiries in that area. Whilst the option of commission or fees are there for non regulated business I believe this will increase, but if like investment business the FCA take away the choice in 2 yrs time of commission on these products like investment business it will decrease considerably. Taking away freedom of choice was the worst thing they could have done. I have clients who pay fees as well as commission so I am not biased towards either route. Its how the client wants to pay is important.

  7. Retail DISTRUCTION Review

  8. Stephen Rowland 26th April 2013 at 11:11 am

    Another one bites the dust!

    Well done FSA – you have put the bricks in via RDR to shut down most of the UK’S FINANCIAL SERVICES!

    Soon there will be more regulators than regulated! – then what will the GRAVY TRAIN do? I know – all go on gardening leave with a big fat pay off & pension & maybe get a gong to boot!

    Will the last one left please turn out the light!

  9. Another “proportionate” increase in FCA/FOS/FSCS fees for the advisers still trading to look forward to!

  10. Arise Sir Hector, for services given to the destruction of the Financial Services industry

  11. I must be a rather peculiar person. I so often find myself the odd one out.

    This news is not cause for further bellyaching, but if you are an Independent adviser it is cause for rejoicing. Am I mistaken or doesn’t this show that the pile it high, sell it hard and flog it cheap ethos is under threat? Doesn’t it seem to indicate that regulation wants to push people into getting INDEPENDENT financial ADVICE?

    Oh and the social workers amongst you – please don’t tell me it then prevents access to advice for the mass market. If this mass market needs legal advice it has to see a lawyer – no if’s or buts. If they need an accountant there is only one way to go. Who knows there may one day even be a scheme such as legal aid for Independent Financial Advice!

    Doesn’t anything make you guys cheerful?

  12. “Aviva says the move has been prompted by consumer demand, which is for internet and telephone-based services rather than a full face-to-face advice service.”
    That is the most telling sentence of this article. The statement is in direct contradiction to basis of RDR, in which case one has to ask, yet again, the real reason for RDR.
    The consumer is saying RDR is not their preferred method of operation. The advisory and wholesale industry has hardly turned cartwheels over it.
    So is the sole beneficiary of RDR the FCA?
    Evidence accumulates to suggest that is the only logical conclusion.
    Quite a way to run an industry that currently amounts to 30% of GDP. If George Obsorne, an alleged Thatcherite, is happy to let Civil Servants nationalise the finance industry then he can’t complain when the economy remains in recession mode.

  13. Oh dear oh dear, 4 months in and stories like this hit on a weekly basis, a few thousand hear a few hundered there, pulling out of the business here cost cutting there, fee increases here levy increases there !!
    Accountability and rules do not apply to the top, its the rank and file who suffer. We will be brought to our knees, it wont be until tax,fees, levies etc etc fail to be paid en-mass, some bright spark will jump and say this was a bad idea we need to put this right.

  14. Harry, I am not a social worker but I believe that once I was your mental health counsellor.

    Keep taking the pills.

  15. If so many jobs had been lost in the car industry as a result of the implementation of rules based on flawed research there would be serious questions in Parliament.

    But as its financial services its okay – despite the fact that as usual its the low paid staff that lose their jobs not those at the top.

  16. Harry, you have always struck me as a person with a measured and considered view, but your comments above appear incredibly naive. If you really believe that the removal of these individuals and institutions from our industry will help our cause as commercial enterprises (because that’s what we are, when we undress all the socially-correct pontification), then I am amazed.

    Who do you believe pays the lion’s share of our industry’s regulatory overhead? Do you really believe that it will reduce on a pro-rata basis as these major players remove themselves from the equation? No, we will pick up a larger proportion of the regulatory overhead than may be affordable, so what then?

    Come on, wise up!

  17. Unless I have missed the point entirely – for all independant advisers who are free of the ties of bankassurance and large direct sales forces isnt this good news ?

    Gone with high pressure bank assurance bank practices, gone with 6% upfront commission payments and little or no long term servicing of clients. Ultimately gone with many of the practices which have given advisers a bad name for many years.

    The need for advice will never disappear – the government makes sure of that every time they make a new announcement on pensions / taxation etc – that means more clients for those good advisers who provide a service to their clients. RDR has passed in my company with barely a ripple – we have always been honest about how we are paid, commission has never “magically ” appeared from thin air, the advice has never been “free” or paid for by the provider and hence the change post RDR has been minimal.

    If the ultimate outcome of RDR is the loss of bank assurance and all the poor practice it encompasses and the loss of the small number of IFAs who have lied to their clients about how they are paid then in my view it has done its job. If that ultimately means a smaller more professional industry then all the better.

  18. @Harry Katz

    “Oh and the social workers amongst you – please don’t tell me it then prevents access to advice for the mass market. If this mass market needs legal advice it has to see a lawyer – no if’s or buts. If they need an accountant there is only one way to go. Who knows there may one day even be a scheme such as legal aid for Independent Financial Advice!”

    I’m afraid you are wrong.
    If the public needs legal advice or an accountant those that can afford it pay for it those that can’t don’t and therefore don’t get any advice in these areas.
    The point of all the complaints about withdrawl of mass market advice is not that clients will now start finding IFA’s because they wont. Obviously IFA’s would be rubbing their hands together if all it ment was a bigger slice of the pie for them. While our slice of the pie will get marginally bigger due to the lack of mass market advice my fear is that the vast majority of the pie will go uneaten.

  19. To: Harry Katz | 26 Apr 2013 11:37 am

    “If this mass market needs legal advice it has to see a lawyer – no if’s or buts. If they need an accountant there is only one way to go.”

    The problems is that the mass market often don’t know they need to see a Financial Adviser until its too late. When people need a solicitor or accountant its because they have an immediate need.

    A widow turning up to discuss the need for life cover on her late husband isn’t really going to work.

  20. @Steve D

    If the only purpose of some of these ‘sales outlets’ is to spread the burden of regulatory imposts, then I do feely admit that the model is well and truly broken.

    Anyway not having a distribution arm doesn’t mean that these firms disappear. They are still in the loop when it comes to paying the levies. But I agree that doesn’t wholly detract from the argument that fewer firms may have to shoulder greater proportion of the burden. However I do take a little comfort in the fact that the powers that be are starting to recognise this.

    This aspect doesn’t take away from my main point – it seems that advice in general and Independent advice in particular looks like becoming flavour of the month. (For now at least!). And that the high pressure sales techniques of the tied outlets (Often selling inferior products with scant connection to advice rather than sales) is currently in decline.

  21. I think some of the IFAs on this forum need to really understand what us bancassurance guys used to do. Yes it was a sales culture, yes there were individuals that exploited that but I would not say that was the majority. The majority of customers on the other hand were normal people who don’t have hundreds of thousands of pounds in the bank, they were introduced to us as we were able to provide a service.

    I understand that our products were not all singing, all dancing but they were better than deposit accounts which would pay them 1%.

    All that’s going to happen now is when these customers deposit cheques into their account, they will be advised to open a fixed rate bond as that’s the only option available to the banks. Most of them are unlikely to ever go and seek financial advice as they won’t have been promoted to. The banks will heavily advertise their bonds instead.

    You IFAs will then understand that we were not competition, we were able to help these people who had never even given any thought to receiving financial advice.

    We introduced a lot of these customers to financial advice and then they turned to you after they had some experience and understanding that you could offer a more premium service.

  22. Looks like only Legal & General left on the High Street with their partnerships with Nationwide, Virgin Money, YBS, N&P, Chelsea BS, Principality BS, Cumberland BS and all the other smaller Regional Building Societies. Assumming they talk to Coventry BS and possible Australian Mutual Group, it will be a complete monopoly soon on High Street advice!!

  23. I agree with I’m not sorry to see the end of another biased and high pressured tied adviser group as its only good news for IFA’s.

    The only thing I would like to point out is the FCA going to step in and start questioning firms like Aviva and indeed banks and building societies for its adequate systems and controls in particular reference to treating clients fairly. After all with seen a considerable amount of jobs being cut in these organisations no mention of how they intend to service their existing clients.

    Don’t these organisations have a duty of care to offer clients adequate advice when requested and if they can’t supply it why aren’t these same organisations at least attempting to form links with existing IFA practices.

    Is it high time that the regulator to enforce basic regulations!

  24. Open letter to David Cameron;

    Have you been reading the financial papers lately?

    Do you realise that within the last 4 months a piece of quango lead regulation has placed probably 10,000 well paid jobs on the scrap heap?

    Do you realise that those 10,000 lost jobs were probably supporting 40,000 family members.

    Do you realise that probably 20,000 conservative voters who will now be seriously thinking I will never vote Conservative again?

  25. Harry k, you have missed the point. When your FCA/FOS/FSCS fees double because of the loss of the critical mass of providers and advisers then the ligh may go on for you also. You may have more business as a result but it is wiped out with excessive costs

  26. RDR has now resulted in 90% of bank based “advice” business going to L&g.
    I hope the numbers work out for L&G because if they don’t that is the end of bank & BS advice and another 3000 lost advisers + support staff

  27. @ Anonymous | 26 Apr 2013 2:06 pm

    Thank you for the most sensible comment on here so far.

    As IFA’s we need big institutions to drive the market. The banks made people who we could not afford to service into users of financial advice service.

    As these individuals became wealthier they searched out better services, or were more receptive to our approaches.

    This has now been lost.

  28. Wow. Soon enough RDR will have destroyed the advisory market. How many poor people had to study to get ready for RDR? And now how many poor people are wondering was it worth it!! Another nail in the coffin. Its a big shame!

  29. @Soren Lorenson

    You beat me to it Soren !

  30. I worked in bancassurance for over 20 years and believe me, the ‘mass market’ which will no longer be able to seek or afford advice – aka the bank customers – didn’t want, or seek advice before RDR.

    They were savers who were stalked, captured and sold investments that the vast majority neither understood nor would have wanted if they had been told all the facts, and the charges involved.

    There have been many justified attacks on bank advisers on these pages but from my experience, your arrows should be pointed at the senior, and I mean senior management who knew very well what was going on, and the front line branch staff and advisers had little or no choice.

    I do not for one minute condone mis-selling in any shape or form, but the truth is that all the bank customers who are now without advisers never had an adviser in the first place, so don’t be surprised if there isn’t a rush to your individual and collective doors from people who are now deprived of fincial advice due to RDR. They don’t exist (except for a very, very small minority.

    What RDR has done, to everyone’s surprise, is remove the bulk of future mis-selling cases by effectively closing the banks’ salesforces. It has also,and sadly, destroyed the lives of thousands of advisers families.

    Think yourselves lucky, and also be aware that with the reduction in bancassance, the complaints figures against IFAs in the future might not look so favourable when there are fewer other ‘culprits’ to mask them.

  31. Message to all of those bank assurance individuals who may have lost their jobs, the world has not come to an end if you’re qualified and passed the new qualification level there is a opportunity for you in the independent sector.

    When one door closes another one opens!

  32. One of the advantages of age is that you have seen many changes.

    Back in the early 60’s bank managers used to introduce clients who needed pensions, life assurance, investments or ‘a policy’ to ‘brokers’ as all that banks did in those days was banking. (How odd!)

    Perhaps we may get back to that. Won’t it be refreshing if Sainsbury’s and Tesco stuck to groceries and M&S to knickers and let those who know what they are doing in financial services get on with it.

  33. To all you supporters or apologists for bank advice. Please read this week’s lead letter from Ron Marrs in that other pink paper.

  34. Whilst I agree with Peter’s post of 4.23, I also agree with Siren and Paul. How unfair for these advisers to do everything asked of them re getting level 4 and then 4 months in their employer pulls the plug! This is not good news for anyone.

  35. @ Peter Herd

    Bless your little cotton socks – You haven’t got a ‘Scooby Doo’ !

    Still waiting for that queue to form outside your door ?

  36. @ Dave Compost

    You nailed it, boy.

    We shouldn’t applaud the loss of these jobs and embrace the warm feeling that as individuals we’ll be better off. This is a deploable attitude and just the type of reaction that enables feeble-minded regulators to destroy the industry.

  37. Most bancassurers havent got a job, no regular premium pensions or investments are sold as its not viable. Eventually these big companies will have depleted funds, fund managers, compliance, fcs, pra etc will have no one bringing in biz and no one to regulate. When people in their thirties hit retirement without a pension it will come to light.

    Rdr needs to be scrapped.

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