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Barclays banks on choice

Money Marketing is absolutely right to highlight the need for a debate on transparency, particularly in the area of how advisers select and recommend product providers.

When Barclays announced the details of its new financial planning advice service for retail customers at the beginning of March, we said that with the help of external experts, we had searched the whole of market to seek out the best providers for each product type.

Barclays’ approach has been customer-led and the process demonstrates transparency at every stage.

However, some industry commentators have questioned or misrepresented our process for selecting the best providers and it is important to set the record straight.

The depolarisation regime gives financial advisers complete flexibility in determining how they select the most appropriate product providers for customers’ product needs. Within this flexibility, a financial advice firm can allow each individual adviser to search the whole of the market each time they see a customer.

However, this rarely happens. In most instances, an individual adviser’s ability to search the whole market for each individual is not practical or possible.

Most IFA firms have operated some degree of panel approach, with the firm carrying out part of the product provider selection process for the individual adviser.

There is no consistent approach to the way that IFA firms put together panels or go through the process of selecting the most appropriate product providers for customers.

The traditional approach has sometimes lacked transparency from the customer’s point of view and, as an industry, we have rarely debated the merits of the different approaches that advisers take in selecting providers. In some cases, it could be argued that the traditional process lacks rigour or formality.

It is hoped that the new regime will encourage a change. For example, with the manifold options available to firms and advisers under the depolarised world, the key will be to demonstrate that the process to seek out the best available in the market place is robust and customer-led. We know our approach will provide this service as well as being on a par with any other type of approach in the marketplace. At the centre of the service is a rigorous selection process that our advisers and customers can rely on.

As no one provider is strong for all products, we independently searched the whole market for the best providers. We selected the top suppliers for each product rather than link to providers across their whole product range.

This process was developed and managed by a highly qualified central team of over 30 people. With the help of external independent experts, their role was to look across the whole market to identify the best that is available.

Barclays is not constrained by an in-house life and pension business so is in a great position to select impartially. The providers we have selected at launch have been chosen using criteria such as product quality, financial strength, customer service and value for money.

But this is not a one-off process and our expert team have a permanent role in constantly monitoring the market to seek out innovation and improved terms. We will leverage our partnerships and have the flexibility to switch providers to maintain our competitive position and ensure we continually offer our customers the products and providers which best suit their needs.

We believe that using Barclays’ scale and expertise to seek out value for money solutions from the top product providers is the most customer-centric approach. It offers significant negotiating benefits, which means we can get the best terms for customers, as well as working with providers to develop bespoke products.

Crucially, there will still be a choice of providers in each product category to give the flexibility to meet customer needs. Even in cases where a customer prefers a provider outside our select choice panel, our advisers have the option to go off panel if this is in the customer’s interests.

As Barclays will pre-select the best available in the market, our advisers can be confident that they have a range of best-breed products tailored to meet customers’ needs and can concentrate on what is the most important element of the adviser-customer relationship – quality of advice.

We welcome the debate on how advisers select the best providers for customers. It is unfortunate that some commentators feel threatened by Barclays’ approach and have reacted emotionally but we believe our focus on putting customers first and transparency is in all our interests.

Stephen Ingledew is commercial director of Barclays Financial Planning


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