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E&Y: Mutuals ‘well positioned’ to fill post-RDR advice void

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Ernst & Young says the mutual sector is “well positioned” to fill the void left by banks that are no longer willing to provide financial advice to the mass market.

Axa and Santander have both closed their advice arms in recent months. Other major banks such as Barclays and HSBC will only offer advice to people with assets above a minimum threshold.

This has led to concerns people who do not have large sums of money to invest will be unable to access financial advice.

In a report published this week, Ernst & Young says mutuals may have a significant role to play in advising mass market investors.

The report says: “Building trust and shared interest with customers is key to driving value, and we are working with a number of organisations to explore how they can retain and reward their existing customers better, as well as attract new ones.

“Mutuals may also be considered well positioned – both philosophically and in terms of their existing relationships – to serve the mass market, to re-engage with the vast number of ‘orphan clients’, to address the ‘advice gap’ opened up by RDR and even to serve the financially disenfranchised.”

The report also suggests mutuals could benefit by “partnering” with other mutuals to offer a broader ranges of services.

It says: “Just like their PLC competitors, mutuals need to be financially robust, well run and deliver excellent and competitive products to their members and customers.

“However, they should also be more capable of collaboration and co-operation with other mutuals than their proprietary rivals.

“Partnering amongst the mutual sector to offer a broader range of propositions or simply to streamline processes could provide a real source of competitive advantage.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. So it is true,
    The FCA are no longer in control of financial advice.
    E&Y are running the show, deciding who will do what for who needs what.
    Is this a cunning plan, cooked up beforehand, coming to fruition?

  2. If it’s not viable to deal with a low net worth client, why would it make sense for a mutual to advise this group of people and why would they want to anyway? Crackers.

  3. 1990s to 2013 all that consultancy work demjtualising building societies and insurance companies 2013 to 2030 all that consultancy work building mutuals capacity and setting up new ones. 2030 to 2050 demtualisation?

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