Barclays has announced that it plans to stop offering financial advice through its retail branches after a review deemed it to be no longer commercially viable.
The bank says it may offer retail investment advice online, but that it expects financial advice in bank branches to decline.
Barclays will shift focus to their online execution only service although they say that existing plans and investments currently held by customers will continue to be serviced.
This is interpreted by many as a response to the levy exacted against advisary organisations by the Financial Services Compensations Scheme (FSCS) that represents a serious challenge to their profitability, combined with demands of the Retail Distribution Review that will, effectively, ban provider commission as a means of remunerating advisers.
The bank was recently fined a record £7.7m by the Financial Services Authority for mis-selling two Aviva funds. We are also aware of at least one case in which Barclays have defied the financial services ombudsman in spite of two rulings against them.
3rd February 2010
