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Banks fading from high street and cutting financial advisers


Banks are beginning to fade from the high-street as some of the biggest financial institutions are cutting branches and staff.

Financial institutions cutting their high-street services include Lloyds banking Group who will be cutting managers, as well as back office and operations staff, whilst Barclays recently confirmed that they will be closing some high-street branches over the next few years.

Furthermore, amongst other staff that are being cut are the in-branch financial advisers, who have shrunk by around 5,000 over the last 12 months according to research group ‘Platforum.’

This significant reduction of in-branch financial advisers is a result of the ‘Retail Distribution Review’ (RDR), which came into effect on December 31st 2012. The RDR was introduced with the aim of improving public trust and confidence in the market, and becoming more transparent with consumers in regards to what they’re paying for when it comes to financial advice.

Before the RDR, financial advisers were able to provide their services without stating an upfront cost, and instead taking a fee via a commission from their client’s investments, which typically ranged between 1% and 8%. However, financial advisers must now agree an upfront fee before any investment is made, leading to many financial institutions cutting their in-branch advisory services.

The latest to cut such services are Nationwide, the UK’s largest building society, who were one of the few financial institutions left on the high-street that have so far maintained their levels of in-branch financial advisers. However, the building society recently announced that they will be reducing their number of in-branch financial advisers from 430 to 300 as of May 2014.

Gina Miller of the wealth manager ‘SCM Private’ said that “cutting in-branch advisers at high street banks is a disaster for hard-working savers. It is another nail in the coffin for accessible financial advice. Many can’t afford to get independent advice elsewhere.”

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