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.