View more on these topics

MM leader: Back to the future on bank advice

Natalie Holt, journalist with Money Marketing Photo by Michael Walter/Troika

There is a perfect regulatory storm brewing that could spell trouble for advisers.

Hot on the heels of our exclusive last week that the Financial Advice Market Review could see the rewriting of the RDR, FCA acting chief executive Tracey McDermott gave an interview to BBC’s Money Box admitting a return to some form of commission could be on the cards.

McDermott has been in the headlines for other reasons too, namely that she does not want the FCA top job on a permanent basis.

At the same time, Santander has set out its plans to return to the investment advice market, with rival banks either waiting in the wings or keeping a watching brief on whether to make a comeback of their own.

For the cynics among us, all of these developments happening at the same time are all too convenient against a backdrop of the bank lobby that is clearly alive and well.

You need only look at their recent results to see how wrong banks have got sales in the past (if further evidence was needed). A quick back-of-the-envelope calculation suggest banks have set aside at least £1.8bn for customer redress over the past year.

About £90m of this relates to Santander itself, including a £43m set-aside in October relating to wealth and investment products and earmarked after agreeing a revised redress scheme with the FCA. This does not bode well.

It is argued that enough water has gone under the bridge since banks pulled out of advice en masse around the introduction of the RDR. Punitive fines and greater accountability rules should curb the misselling excesses of the past (admittedly, this is not an argument advanced by advisers).

But can a leopard really change its spots?

It would be a significant turnaround if bank advisers could shake off the reputation of cowboy salesmen. If they can, and it is a big if, the use of technology and a guidance-led service could  serve those with £50,000 or less to invest, who arguably advisers may not be targeting anyway.  Those with more complex needs would clearly need to be referred to an adviser.

But it all comes down to that rather nebulous concept often touted in regulatory speeches – culture. Has this really changed enough in the banking industry to hand them one of the greatest responsibilities there is in financial services – giving suitable advice?

I am not holding my breath.

Natalie Holt is editor of Money Marketing. Follow her on Twitter: @Natalie_Holt_MM



Santander UK confirms investment advice return

Santander has confirmed it will return to the UK investment advice market less than two years after being hit with a £12.4m fine by the FCA, the FT reports. Reports first emerged in September last year that the bank was eyeing a return to the market in response to an expected slowdown in current account […]

FCA interior 620x430

Industry demands answers on Mifid II deadline delay

The industry is calling for confirmation of whether the deadline for implementation of Mifid II will be delayed, as fears grow that smaller firms are falling behind in their preparations. An FCA roundtable on Mifid II, attended by the regulator and various industry trade bodies, highlighted the confusion in the industry over Mifid II deadlines. […]


Half of small firms struggle with auto-enrolment

Nearly half of small businesses subject to auto-enrolment are unclear on the rules, according to research from the Federation of Small Businesses. Around 45 per cent of 1,000 firms surveyed did not understand their responsibilities, the FT reports. The research also found that 25 per cent of small businesses were worried they could not afford auto-enrolment, […]


News and expert analysis straight to your inbox

Sign up


There is one comment at the moment, we would love to hear your opinion too.

  1. Having seen first hand the appalling “advice” dolled out by bank advisers with restricted permissions in the past, this turn of events is worrying indeed. I hear and see nothing from our trade and professional bodies to protect the improving reputation of advisory businesses, hard won over the last three years, from these scoundrels.

Leave a comment


Why register with Money Marketing ?

Providing trusted insight for professional advisers.  Since 1985 Money Marketing has helped promote and analyse the financial adviser community in the UK and continues to be the trusted industry brand for independent insight and advice.

News & analysis delivered directly to your inbox
Register today to receive our range of news alerts including daily and weekly briefings

Money Marketing Events
Be the first to hear about our industry leading conferences, awards, roundtables and more.

Research and insight
Take part in and see the results of Money Marketing's flagship investigations into industry trends.

Have your say
Only registered users can post comments. As the voice of the adviser community, our content generates robust debate. Sign up today and make your voice heard.

Register now

Having problems?

Contact us on +44 (0)20 7292 3712

Lines are open Monday to Friday 9:00am -5.00pm