Last One Out Turn Off The Lights

The announcement recently that Santander are to reduce their in-branch advisers from 874 to 150 nationally follows the trend by the other banks including Lloyds TSB, HSBC, RBS and Barclays in eliminating or hugely reducing the number of advisers they have.

The exit is not only being seen amongst the big players as a number of building societies have also withdrawn from the market. In early 2011 Norwich & Peterborough Building Society sold their sales force to Aviva and ceased to give investment advice to their customers.

One would be forgiven for thinking that there is not the demand or need for advice hence the dramatic reduction in numbers of advisers. In reality the opposite is the case with all of us living for longer and the cost of living, particularly in later years, rising, and with the reduction in employer provided pensions benefits there is an increasing need for individuals to save for the longer term, to invest in individual pensions and to provide for their loved ones through life assurance. With the options already complex and becoming more so there is an increasing need for advice.

With the availability of advice for investment products being reduced the current UK Government is now putting in plans to reduce the accessibility of advice for mortgage products. Similar to the Retail Distribution Review (RDR) the Mortgage Market Review (MMR) set out to protect customers but is in fact making it far more difficult to get advice. For instance should a customer phone up a bank such as First Direct and ask about mortgage products the bank employee will not be able to talk about the difference between a fixed-rate mortgage versus a variable rate mortgage since that would be seen as advice and without completing a fact find that will no longer be possible. This could once again, see mortgage advisors and brokers withdrawing from the market.

Not all banks are withdrawing from either the investment market or the mortgage market. There are those who are considering the commercials and rather than quitting are looking at innovative ways of improving productivity of their advisors. Both Bank of America and Bank of Moscow have pilots out using videoconferencing to bring the advisors virtually to the branches. With the increasing acceptance of videoconferencing through the likes of Apple's Facetime or Skype, the availability on devices such as the iPad, then those organisations with the imagination may still be able to find ways to commercially provide advice to the mass market. In addition there is the heavily marketed Money Advice Service which is supposed to help fill the gap.

All of these other options may not appeal to the more mature client who may well prefer to look an adviser in the eye when they tell them to take care with their money!

For further information please contact Shipman Financial Planning Ltd, 1 Barnfield Crescent, Exeter, EX1 1QY, telephone 01392 278491 or email info@shipmanfp.co.uk. This article is for general information only and reflects the views of the author only. You should seek professional advice in respect of your own circumstances. Authorised and regulated by the Financial Conduct Authority. Shipman Financial Planning is a highly respected professional adviser offering personal service and innovative advice.