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Cummings says banks shutting down IFA firms

Aifa is warning of a growing number of banks closing the business accounts of IFAs and suggests that this could be an attempt to wipe out distribution competition.

Speaking at a Money Marketing round table on the retail distribution review and new blood last week, Aifa director general Chris Cummings said an alarming number of members are complaining to him that their corporate accounts have been closed.

He said: “I am having members report around Bristol and Cardiff that banks are closing the business accounts of IFAs. I have now had members in double figures calling me and saying their business account has been closed. It is not just the odd one or two.

“It is interesting if this is how banks are going to start treating IFA business customers because it seems to me that if they can’t beat us they are going to try and close us down.”

Cambria Mortgage Services principal Paul Fielding, a board member of the Association of Mortgage Intermediaries, claims that his HSBC business manager told him in mid-November that the bank was no longer supporting IFAs.

Fielding says: “It is as if the banks are hellbent on closing us down and then they can do what they want. It is a nightmare.”

HSBC says it has not changed its policy towards IFA firms. A spokesman says: “Unfortunately, some people’s businesses are changing and we have to respond appropriately. This is done on a case by case basis, we are certainly not targeting IFAs.”

At the round table, Financial Advice Academy chief execu- tive Bob Gill said: “Banks have changed their risk evaluation process and the bar for firms was raised so businesses that have not changed one bit are now considered too risky by the banks. I have heard of firms that were given no warning before their overdraft was reined in, making it impossible to trade. It is definitely being seen as a trend in the industry.”

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  1. Just enquired at my local HSBC, about switching our IFA company’s business account to them. The account is very comfortably in credit. The bank’ business manager explained that HSBC are not opening accounts for FCA registered companies.

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