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Santander considers exit from investment advice – 880 jobs at risk

Santander 480

Santander UK is to carry out a strategic review of its investment advice arm which could see the bank pull out of investment advice altogether, with 880 jobs at risk.

Money Marketing understands Santander is being investigated by the FSA following a mystery shopping exercise into the quality of investment advice at six major banks and building societies.

A total of 881 advisers, management and back office staff are being told at a meeting in Birmingham today that the bank is considering how to offer investment advice to customers in future. Options under consideration include continuing to provide mass market investment advice, investment advice purely for affluent customers, and a complete closure of its advice arm.

Santander will continue to provide advice to existing customers, but will not be taking on new business until it can “find the right model”.

In December Money Marketing revealed Santander had suspended its investment advice service and pulled 800 advisers off the road with immediate effect because they were not fully trained to meet “RDR suitability and processes” requirements . At the time, Santander said the advisers would be put on a six-week “intensive training programme” to bring them up to speed.

The bank now says plans to restart its face to face advice service have been delayed due to the “regulatory expectations post-RDR, the further investment that would be required and the length of time needed to complete that investment.”

Santander says it is working to secure roles elsewhere in the business for any affected staff.

A Santander UK spokesman says: “There is never a good time to announce changes such as this and we are acutely aware of the uncertainty staff are facing.

“Santander UK will continue to review how and to whom it can provide face-to-face advice, within the new regulatory framework, in a way that benefits and protects customers, our colleagues and indeed Santander itself.

“Santander’s customer base is generally mass-market, exactly the type of people that can benefit from financial advice. This is why we have worked very hard, and will continue to consider how we can best meet the needs of our customers in this area.”

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Comments

There are 24 comments at the moment, we would love to hear your opinion too.

  1. I think the idea of a yet more intrusive regulator, more costs, more challenges, more compensation and more retrospective reviews is demonstrating that financial advice is no longer commercially viable.

    With their management accounts the big providers like Santander are just discovering this. Most of us know it in our bones but have yet to admit it.

  2. Can’t be a co-incidence about the FSA mystery shopping outcome, 1 bank facing enforcement and this news.

    1. How on earth did Santander management not wake up to RDR and get prepared for it?

    2. Selfish question, if these poor people do lose their jobs, is that 880 less people in the ‘pot’ paying the FSCS/FSA fees? Diminishing the intermediary pool for funding yet further?

  3. As a businessman this is great news. I have been receiving enquiries from clients who went to banks only to be told they dont provide advice. As a human being I am concerned that so many clients will receive no advice and also feel sad for the banks sales staff losing their jobs.

  4. If Santander pull out this really is the beginning of the end for financial advice to the masses.The FSA with RDR has created a environment where only the very rich will get advice. What a shambles. It is time that our so called government stepped in and looked again at the RDR model. Sie Hector Sants has a lot to answer for in allowing the financial services int his country to be decimated juat so he could justify his salary and not forgetting his Knighthood. An over regulated environment doed no one any good except the regulator

  5. Nicholas Pleasure 13th February 2013 at 12:22 pm

    @ Soren

    I agree. The constant threats from ‘ever tougher’ regulators are such that we never know whether we are really doing the right thing and documenting it correctly.

    Our regulators are trying to achieve perfection without realising that human beings can never achieve that. Therefore the logical conclusion is that there can be no business case to continue.

    The public will be denied any form of financial advice at a time when live and money are increasingly complex. They will be left to sink or swim in a DIY world.

    If I could, I would get out of financial services tomorrow.

  6. You can’t ‘retrain’ ethics.

  7. I’m not sure this is even about RDR. It is simply about over regulation and unfair regulation.

    The FSA showed in 2012 that it has no intention of standing by the basic rules of justice with its handling of Arch Cru and Ketdata.

    It looks after itself and the Governments friends like Capita but it is quite happy to stamp all over the wealth creators. I know as IFA’s we think the banks get an easy ride but try talking to anyone senior at a bank and they hate the regulator as much as we do.

    If Government doesn’t wake up to what is happening soon their will shortly be no financial services business left in this country. Watch what happens to the social security budget when the effect of that hits home.

  8. Ah the benefits of age! You youngsters probably have no idea of the time when local banks and building societies didn’t dabble in investments, or life assurance, but just stuck to their knitting – banking.
    It looks as if we may well be reverting to that. What did they do in those days? Refer these matters to a ‘broker’ – or hopefully today to an IFA.

  9. I partly understand the sentiment in the post by Anonymous at 12:16 and I personally do wonder about ‘mass market’ advice in the future – however I still feel that the principle of ‘wealthier’ clients helping to meet the cost of advice for ‘less wealthy’ clients flies in the face of fairness.

    RDR has put the cost of advice squarely in front of clients and I hope that in the medium to long term, this will create a level playing field for clients seeking advice.

    Looking at it another way, what’s being questioned here was going on BEFORE RDR and therefore it would appear that RDR is highlighting it (rather than causing it).

  10. Soon the banks will come to realise that getting involved in providing suitable financial advice to consumers can only be done under the Independent model, which banks don’t seem to be able to cope with, the better.

    Mine and my wifes own experience of Santandar “investment advisers” was not very good, they tried to sell her a 100,000 bond invested in Securities based in Guernsey, stating it was low risk when in fact it was a very high risk product with little comeback if mis sold as it was not regulated by FSA

    I feel sorry for the advisers who are being let down by a banking system which to date has caused more problems than it can solve.

    Investments should be handled by investment firms and banks should concentrate on retail banking.

    Get back to basics.

  11. Santander will continue to provide advice to existing customers, but will not be taking on new business until it can “find the right model”.

    To provide advice to existing clients still requires being compliant!

  12. This can only be a good thing for the IFA’s across the UK. What Santander need to do know is build relationships with IFA’s for referrals which can be very good for the independents.

  13. @ Anonymous 12.16pm

    Surely the “beginning of the end” was pretty much 2 years ago to the day, when Barclays announced they were pulling out of financial advice in branches. Since then we’ve had similar moves from HSBC, Lloyds, HBOS and now Santander (although some of those less extreme than Barclays).

    Are there any banks now that will offer advice to someone who has less than £100k to invest?

  14. SC @ Lloyds wealth 13th February 2013 at 1:57 pm

    SO ARE THESE ADVISERS OFFICIALLY AT RISK OF REDUNDANCY?
    THIS IS NOT CLEAR?

  15. This baby has well and truly been thrown out with the bathwater.

    You will note that the FSA sows … the (grim) reaper as far as investment advice for the everyday person is concerned.

    The law of unintended consequences strikes again.

  16. Another 881 jobs down the swany will the FSA get in the guiness book of records for destroying the most jobs ever in the UK.

  17. If their advice is as bad as their archiving precedures, then they deserve to be closed down.

    They simply cannot trace any letter of authority from a client, despite 4, yes 4 separate submissions and hand wringing from managers. I can’t deal with them any more. I don’t want to be another stress/heart attack statistic.

    Devil take them all as far as I’m concerned.

  18. Not sure if the referral to enforcement or RDR is the issue for Santander. If the former, it might seem that a sales driven culture is more the issue than RDR…..

  19. To Ned Naylor ~ Isn’t advice on any investment, regulated or not, regulated? Thus, anyone who, for example, recommended unregulated Stirling Mortimer investments is subject to the same onslaught of regulatory action as if they’d recommended a fully regulated investment.

    Then again, as we’ve seen with KeyData and ArchCru, the fact that a product or fund may be regulated affords no assurance that they’re any safer than their unregulated counterparts. The only difference is that when a regulated product or fund blows apart, the FSA shucks off all responsibility for its own failings onto the IFA sector on the grounds that we should have done more in-depth due diligence.

  20. I do think that it is about time that the FSA took control and stopped advisers benefiting from other people’s money, all advice should be independent and fair, at the moment there is no such thing as impart, as all persuade their customer to take out a product which is likely fed by the need for them to hit a certain target to achieve a bonus. Having worked in both the private and public sectors I am well aware or the demands and constraints of both! I just know that working in the public sector and genuinely helping others on a low salary with no bonus, my concience is clear!

  21. Ah Harry! the (dubious) benefis of even greater age!

    As a Life Company Inspector 40 or more years ago, one of my best sources of Business was Bank Managers, who in those days were allowed personal agencies, with commission payable not to the Bank, but direct to the Manager, who could and would approve loans on condition that a Whole of Life or Endowment policy was set up, through said Agency, but actually sold by the Life Co. Inspector. The moral aspects of that were???

    There were many stories of Managers with commisson income of several multiples of their salary.

    Not quite just sticking to the knitting! Having said that, most Branch Managers at tha time were keen to sell only what was appropriate, and it was only when the Bank Senior Management saw the opportuities and took the business away from their Branch Managers that it started to go pear shaped.

  22. Incriminating evidence was sent to the regulator, thankfully it was awake at the time.

  23. Amongst all this talk about “sticking to what you’re good at” it is possible to forget that Santander are a shockingly bad lender that abuses financial advisers and clients equally. Good rates bad lender.
    Those of you that see this as less competition in the market are confused, they were never any competition. They were still better than no advice. Don’t have sympathy for the great-unadvised public, largely they will get what they deserve – blissful ignorance.

  24. Anonymous 8.02 your conscience is not clear. You are simply another public sector parasite, bragging about your charity work funded by us. Your lack of knowledge is surely only matched by your abundance of misplaced righteousness.

    ………….There I feel better now………….

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