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Santander cuts 724 jobs as it pulls out of investment advice

Santander 480

Santander has confirmed it has pulled out of investment advice but has set up a “financial planning” arm of 150 staff to deal with existing customers resulting in the loss of 724 jobs, Money Marketing can reveal.

The bank has completed the strategic review it began in December when Money Marketing revealed it suspended all 874 investment advisers as they were not RDR ready. It told staff in February that they were at risk of redundancy. The firm also faces an FSA investigation over its investment advice.

An individual consultation period is already underway for all staff that will run up until 6 May 2013. The bank is consulting with trade unions but if staff are unable to find suitable alternative roles then notice of redundancy will be served on 7 May 2013.

The new financial planning team will consist of 150 staff, with affected individuals being considered for these roles. In addition, staff could be relocated to other divisions within Santander in retail, including the mass affluent ‘Select’ division and business banking.

There is also a freeze on external recruitment within the retail division as it seeks to redeploy bancassurance staff.

A Santander UK spokeswoman says: “There is never a good time to announce changes such as this and we are acutely aware of the uncertainty staff are facing. We are working closely with other business areas to ensure that many of those who may be impacted are able to secure roles in a growing Santander Group and we are committed to redeploying as many colleagues as possible.

“We will continue to consult with the unions during this period of change and we will be offering full outplacement support. We thank colleagues for their continued professionalism and cooperation.

“Santander UK will continue to provide advice to existing customers with maturing investments. We will also continue to explore how and to whom we 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.”

FSA figures show the number of bank and building society advisers fell by 44 per cent from an estimated 8,658 in 2011 to 4,809 on the first day the RDR was introduced.

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Comments

There are 27 comments at the moment, we would love to hear your opinion too.

  1. Please tell me that someone out there is keep count of ALL the job losses due to RDR, that is not only advisers but back office staff and from providers as well.

    Mr Sants and Co. have really done their jobs well.

  2. Some will be pleased to hear this news but, whatever your view, there is simply no doubt that the FSA has cost tens of thousands of jobs in the banking sector and in firms that distribute financial products and more still indirectly.

  3. This is seriously sad news, I just think of those poor Santander people jobless, what an environment to get another job in financial services.

    Those people who were in favour of the RDR should all hang your heads in shame.

  4. Whilst it’s sad to see advisers lose their job, I have to say that whilst RDR is perhaps the catalyst, the reason behind it is more likely to be because banks were charging for advice but not perhaps making that clear ….. and in a transparent ‘advice’ word, they can’t continue to do so.

  5. Whilst I’m an IFA who will probably benefit from the likes of Santander leaving the financial advice market I can’t help thinking this can’t be right. Is this what RDR intended, because if it did it’s a strange world we live in. Thousands of jobs directly affected and no one seems to care less.
    I hope the people resonsible for this mess sit proud today.

  6. wasnt it a Santander sales man that was exposed on Panorama suggesting to the investor that just by looking in her eyes he knew what risk profile she was? I could be wrong, might have been a Nationwide expert.

  7. I feel very sorry for the staff but hopefully now we can start to build a profession that everybody can be proud of instead of the high pressured sales environment that these unfortunate individuals have had to work under.

    The FCA will need to enforce authorisation rules and make sure that online web sites that propose to give “free” advice are regulated properly. As we are now seeing the end of the so called free advice from banks, which only meant selling inappropriate products with high charges, we don’t want the same mistakes to be repeated through comparison web sites.

    Our industry has gone through immense change through RDR, not all of it good but now we have clearer charges, advisers should be campaigning for a level playing field and that means enforcement of the Financial Services and Marketing Act 2000 with respects to authorisation and forcing on line comparison sites to comply with COBS just as independent advisers do.

    I wish I had the resources to take the regulator to talk with respects to non enforcement of authorisation rules, if you do a simple search for “free advice” you will see what I mean.

    If the regulator were to enforce these rules, all of these staff would easily find positions, particularly if they have Level 4 qualifications.

  8. william fortune 28th March 2013 at 4:01 pm

    so let me see, after the drop of 44% to leave 4,809 then take away 724 = 4085 left and thats assuming there have be no further losses during the time the FSA figures were calculated up to and today. Of course in the words of the FSA ‘there could be some double counting’ (see the MM Article on 27th March) incredible, thank goodness they are not in charge of my ever dwindling savings.what a shower !

  9. And so another advice centre for average man/woman is to close. If this is the justification that Cicutti states for RDR then what a disgrace. Thousands of people out of work because of RDR. Millions of ordinary folk unable to get advice because they cannot afford the cost. Advisers leaving the business because overheads will rise. FSA we know you are finished as from the 31st so you can all go home and blame someone else for the mess that will come to light in a few months

  10. I’m sorry, but this is the short term pain that will result in long term gain. The phrase “The firm also faces an FSA investigation over its investment advice” suggests that the type of advice that was on offer from Santander was the type that should have no place in this market.

    If Santander felt they could not offer a professional advice service, then they have taken the right decision. The leaves the door open for someone else to offer the appropriate professional service to these customers need, whether advised or non advised.

    The key question is whether bad advice is better than no advice. I’ll let you make your own mind up on this.

    As previously mentioned, the real people I feel sorry for are the individuals who have lost their jobs and this livlihoods through no fault of their own, but because their employer was not willing to support them.

  11. sdsad sdsd | 28 Mar 2013 4:08 pm

    I’m sorry to say but you’re spot on, I just feel sad for the individuals as they all have families and mortgages to pay.

  12. Of course I do feel sorry in some ways for the advisers as their employers have let them down badly, but in truth some of the advice they have given some of my clients has been absolutely dire. It’s not their fault they weren’t up to the job, but they were getting away with murder whilst IFAs were – and still are – being constantly hammered by the regulator. Welcome to our world….

  13. Whilst I appreciate their advisers may not have been giving very good advice, is for the regulator to get in there and make sure they improve. NOT CLOSE THEM DOWN!

    Simples

  14. SO now that all IFAs and bank based advisers have to be open about what they were charging people for putting them into various funds, often on the basis that the reccomended fund paid THEM more commission the whole business model doesn’t work. And some of you lot have the cheek to moan about that? hang your heads in SHAME,

    RDR has simply shown that people aren’t prepared to pay what they see as rip-off prices for “advice”. ANy half decent sales person with a worthwhile product or service can communicate the value proposition to potential customers. The fact that IFAs can’t do so means eithers they are lousy sales people of there is insufficient value in what they were offering.
    Why would anyone want to pay an IFA 5% of the money they were investing in a managed fun whocse performance was in the public domain, when they can buy the same fund on a platform for no up front commission cost.
    IFAs are going out of business because they took money of people without the informed consent of those people and now they actuall have to ask for a fee up front they find people won’t pay it, clearly indicating tat they think they were being ripped off before.

  15. Anon 4.31.
    Well I would be more impressed if you could spell and your command of English was any good.
    Yes, the good guys are still here, we have lost some however and the value of independent advice has been taken away from many people who need it most.
    FSA thanks and goodbye.

  16. Because criticism of some of Santanders advice is on the cards, it is incorrect to assume that all advice from Santander, and all other bank advisers is bad advice.
    It simply is not, and you live in an ivory towered glass house if you think this exit from the market will benefit you. A smaller overall market benefits nobody.
    Simple fact is that bancassurance in the main generated its own custom. It did not steal from IFA’s . How many IFAs lost business to a bank? – hardly any. How many bankassurance customers did you convert? a lot more than you ever lost.
    The banks huge lead generation machines will be switched off, and if you think the same people who chose to do business with their bank are suddenly going to go searching out an IFA then think again.
    You will get only a small percentage of what the banks leave behind, the rest will dissappear back to savings accounts(quite good for banks-bad for IFA’s) and National Savings etc.
    Not a day for any sensible industry professional to celebrate

  17. So that means about 50% of Bank/BS advisers have gone along with their FCA fees for next year.
    I wonder who will be left to pick up the Tab due to the loss of their fees? Either the FCA reduce their staffing numbers or IFA’s will be in for some seriously increased fees.

  18. RegulatorSaurusRex 28th March 2013 at 5:40 pm

    “the advice is free”
    “this investment is guaranteed by the FSCS”

    This has nothing whatsoever to do with RDR.

  19. Not only did these advisers, help normal low value clients have access to mostly sound investment advice, but the point everyone forgets is these advisers provided life cover, income protection and other insurance to people, that other wise would have none.

    A Santander adviser helped my father and arranged a large life insurance plan, which on his death was a life saver for our family !!

  20. How sad, can the FSA not see they are putting themselves out of a job.
    This is what wil lhappen, non-authorised people will advise on execution basis or non-authorised people will place there business through a authorised adviser.

    It will be driven underground.

  21. I agree with ADD. This is NOT good news for anyone, the consumer, the remaining IFAs and bancasurers (are any left) or the FSA and Sire Hector the undeserved who are now proven to have been wrong all along in what they were spinning.

    Any ex Santander advisers fancy a trip tkmnthe seaside for a chat about the future, you can find me on Linked-in or via the FSA register!

  22. @Grim Reaper

    No that was an HSBC advisor

  23. ‘The total number of advisers after the RDR deadline was also down 13 per cent from the 35,899 advisers the FSA estimated were operating in summer 2012. Of the post-RDR total, 30,045 were fully qualified retail investment advisers and 965 were part qualified, including those who have until 30 June to become RDR compliant.

    FSA estimates suggest there were 25,616 IFAs, tied and multi-tied advisers in December 2011, of which 21,696 were IFAs. This fell 20 per cent to an equivalent 20,453 advisers after the RDR deadline. The FSA is unable to give a split for IFAs.’

    I am not an adviser, but my view is that the UK is swamped in debt and the days of regular premium pension and savings products are over. The high cost of housing, rents and mortgages which is still going up, plus wage stagnation and an increasing costs of living has had an impact on all industries, and financial services has e added burden of mis trust by the public with one mis selling scandal after another and little confidence in investing.

    I would be interested to see the adviser numbers at the end of 2013 and 2014 to gain a more accurate picture.

  24. black and white 29th March 2013 at 8:04 pm

    I feel sorry for the santander advisers, but they should have saw this coming and stopped believing the bank big wigs, and acted on their own benefit. Banks should not be providing any investment advice, pension or protection advice especially as they are tied to one product provider. This is simply not on and does not give the customer the best range of product. Having worked for one as an adviser the sales process for most of them is not fit for purpose as plans, policies sold are simply poor quality business just thrown against the wall due to sales process that is volume driven and not quality driven.

  25. One of the remaining few 2nd April 2013 at 11:51 am

    Anon 29.3.13. @ 8.04pm

    You say banks should not be offering any protection advice?
    Would you expect, then, that these clients will walk through the door of an IFA instead?
    I doubt it very much!

    All that would mean is thousands of families and individuals having no provision in the event of death or illness/serious illness.

    Even with tied advice customers still have CHOICE, the choice to go elsewhere to get quotes.

    Like it or lump it banks have their own customer base which they service and advise. Customers in the main are happy with the service they receive.

    But hey lets take a leaf out of your book and leave all of these customers unprotected or to self advise via moneysupermarket!!

    Where would we be then??

  26. I agree with one of the remaining who posted above, but then I was a bank adviser for 7 years. There is definitely a place for bank advice for the right clients on the right basis, but it will not be as profitable as the banks would like, so they need to streamline their methods and the FOS need to be brought to heel first. As an IFA, I actually see the withdrawal (temporary) of bank advice as a bad thing as from previous experience, a larger catchment area with no increase in quality of clients can result in a reduction in earnings as happened for me when I had too cover extra bank branches when another adviser was off sick. More management meetings and enquiries from non profitable people means more work for less money.

  27. Lets think about the customer for a minute. Is RDR not partly designed to help customers get the advice they need – especially in the financial climate we are in – all this has done is limit where people can go for advice – making it more difficult – and the mass market customer who needs advice the most either now goes online and has a stab at advising themselves – or worse still – does nothing. What a mess !!!

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