Banks to Shut Retail Financial Advice Services Shortly
The banks of United Kingdom will shut their retail financial services to their customers. This decision has been taken by the Barclays Plc, as they face higher cost for providing these services to their customers. These reports are claimed by the Financial Times.
This will be the end of going to the bank for financial help. The banks will end their retail financial advice services from the next week. All the high street banks are likely to follow Barclays Bank.
The financial authorities will impose a ban on commissions paid by product providers from 2013.
Analysts say the unexpected side effect of the ban on commissions will be to drive the cost of advice up, creating an “advice gap” in the UK, where only the wealthy can afford proper financial planning advice.
“Unless the FSA and the industry are able to come up with a lower cost advice process, it will be very challenging for any retail bank to provide full investment advice to their mass market customers”, said Malcolm Kerr, author of the Ernst & Young report.
The ban in commission is a part of the sweeping review. The financial advice will therefore suffer huge revenue loss for the banks.
According to Barclays, the Barclays Financial Planning was the business, which had suffered losses in the recent years.
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