Banks and building societies have slashed the number of front-line investment advisers they employ by almost a fifth in recent years in the wake of the RDR and numerous misselling scandals.
Analysis published by regulatory consultancy Bovills shows the number of bank staff authorised by the FCA to sell investment products dropped 16 per cent between March 2011 and March 2015, from 41,760 to 35,130.
The firm says: “Most of the large high street banks have either pulled out of providing financial advice on investment products or scaled back their advice models to only providing advice to higher income earners.
“This is due to the high costs involved in providing advice without being able to subsidise their service from profits from in-house products.”
Bovills head of wealth management and banks Mark Spiers says a combination of the RDR and tougher bank regulation from the FCA has driven the decline in bank advisers.
He says: “Pressure from the FCA for banks and building societies to move away from rewarding its staff on the basis of the volume of financial products they sell has forced most of the high street banks to readdress how they provide financial advice.
“That has precipitated a significant drop off in the number of staff employed to sell investment products at the banks.
“However, the introduction of RDR has not been the only factor driving the banks away from providing advice. The FCA has been particularly aggressive in going after banks that have implemented high pressured selling techniques, encouraging bank staff to sell products customers didn’t need in order to boost their bonuses.”