The main catalyst for poor advice in the big institutions is the way the management target and reward staff. It is not that the staff have bad intentions or that they have insufficient knowledge, it is that they are badly monitored and managed.
In place of hands-on management, the company finds it more costeffective and profitable to set targets to the counter staff for numbers of referrals and targets to the advisers for numbers of appointments, conversions and sales.
If they do not hit their targets, they are subjected to unpleasant management pressure. The whole business model is more about making a profit from a revolving door than it is about having a sustainable business with ongoing client service and retaining those clients and their investments on the book.
These companies have been getting away with taking commission for scant advice (mostly just implementation and a template suitability letter) and taking trail but not delivering an ongoing service rather moving on to the next hot prospect who happens to have a big amount in their account.
They must be getting short of appointments because I now regularly get approached by my bank when my current account goes over £5,000.
While this is too little for most IFAs to warrant the full advice process, it is obviously enough for the bank to make a profit on but only if they do enough of them and do not spend too much time and trouble investigating the suitability in the context of the client’s full financial circumstances. I cannot see this getting any better when they move to a restricted advice model.