Lloyds Banking Group is axing its mass-market investment advice service from November, Money Marketing can reveal.
Only consumers with £100,000 or more to invest will be offered face-to-face advice through LBG’s private banking services.
In February, the group announced it will split its advice offering between basic protection advice and a “financial planning” service. LBG says this service will no longer be offered to consumers with less than £100,000 to invest after research showed the majority of these consumers are not prepared to pay a fee for advice.
Basic protection advice will continue to be offered to all consumers.
Money Marketing understands around 1,000 advisers will be affected by the decision but Lloyds says there will be no compulsory redundancies as a result of the move.
A Lloyds Banking Group spokesman says: “An extensive review of how the market will evolve after the RDR has shown that for the majority of our customers, demand for a fee based financial planning advice service decreases when they have lower amounts to invest. As a result, from November we will not offer an investment advice service for customers who hold less than £100,000 in savings and investments. We will continue to offer protection advice.
“Existing retail investment customers with less than £100,000 of investable assets will be able to access a non-advised service through Halifax, Bank of Scotland and Lloyds TSB. We will give customers information and help with savings products on a non-advised basis and during 2013 we will increase the range of savings products available.
“We will continue to grow our bancassurance business. It will be a simplified business with transparent products that add value and protect our customers. Bancassurance remains part of our overall strategy to become the best bank for customers.”
Several banks have now set out their plans for delivering advice post-RDR.
Barclays decided to close its financial planning arm in January 2011 and exit the market for retail consumers. It continues to offer advice to high-net-worth clients through Barclays Wealth.
In April this year, HSBC announced it was scrapping its tied advice service. It is keeping its whole-of-market investment advice service, but it will only be offered to “Premier” clients. To qualify, clients must have savings or investments of at least £50,000 with HSBC and have their main income paid into an HSBC account, or have an individual annual income of at least £100,000 and a mortgage with HSBC of at least £300,000. HSBC is also keeping its execution-only services. It will offer advice on its own mortgage and protection products in-branch.
In June, the Royal Bank of Scotland announced it was scrapping its 118-strong IFA arm and moving to a restricted advice model as part of an overhaul of its advice service ahead of the RDR. The bank has also reduced its financial planning arm by half, resulting in the loss of 618 jobs.
Nationwide Building Society will offer an investment advice service to all customers through its single-tie agreement with Legal & General. It will use a panel of around 20 funds to construct portfolios of different risk levels offered through L&G product wrappers.
Nationwide will continue to offer a whole of market annuity service and multi-tied protection advice to all customers.