Help on offer to abandoned bank investors
Bank customers looking for investment advice are being turned away because of new government legislation coming into force in January of next year.
Shrewsbury-based independent financial advisor Grainger Jones of Escom Ltd explained that the reason was new rules meaning that commission could no longer be paid from product providers to companies for introducing customers - instead advisors must charge clients a fee for providing advice.
Lloyds Banking Group, which includes Halifax and Bank of Scotland brands, has just announced that it is axing mass-market investment advice to its customers, with only people having £100,000 or more to invest now being offered advice through its private banking service.
Grainger, who is based on Wyle Cop with business partner Emma Wigley, commented: “Most banks have now got rid of the vast majority of their financial advisors and in effect are abandoning a huge number of regular customers who require ongoing advice for their savings, investments and retirement planning.
“Lloyds has said that they will provide products to customers with less than £100,000 without providing advice. This may lead customers to question whether they have bought a product that is the most appropriate for their financial needs.
“If it subsequently turns out that a product wasn’t actually suitable they are going to have very little in the way of recourse because they weren’t ‘advised’. If products are bought as a result of taking financial advice then it is the advisor who is responsible, giving valuable protection to the consumer.”
Earlier this year Barclays, HSBC and the Royal Bank of Scotland announced that they were also getting rid of their financial advisors.
Emma said that anyone who feels they have been abandoned by the banks and want to review their planning to ensure it is appropriate, should turn to an Independent Financial Adviser (IFA). Many IFAs will provide a free and informal initial meeting to explain available options and put people at ease.
She stressed: “All IFAs will have re-qualified under the new rules and unlike the banks have always offered professional advice across the whole market of different financial services products, including investments, pensions, mortgages and insurance.”
