You may have noticed the recent news that Lloyds Banking Group is to stop offering investment advice in its high street branches to customers who hold less than £100,000 in savings and investments. Barclays made a similar move last year, announcing it would stop giving financial advice to individual customers in its bank branches.
Both decisions are directly related to an overhaul of how financial advice is given, known as the Retail Distribution Review or ‘RDR’ for short, which comes into effect on 31st December 2012. This has meant the banks’ costs are likely to rise at exactly the same time as they will have to be more explicit about how much their advice is costing customers.
Given the attention these sorts of announcements are receiving in the media – not to mention the increasing number of articles on RDR appearing in the press – we thought this would be a good time to address the subject and explain the changes you can expect to see as a client of Abacus Wealth Planning Ltd as a consequence.
The RDR is specifically designed to improve people’s understanding of, as well as increase their confidence in, financial advice. It aims to raise the level of professionalism among financial advisers so the minimum qualifications required are being increased and the way in which you pay for that advice is being altered to ensure complete transparency.
This will affect all financial advisers to an extent. However, much of the reasoning behind high street banks deciding to withdraw from in-branch advice does not hold true for all advisers – particularly ourselves.
Our advisers have either already gained, or are in the final stages of, obtaining the increased level of qualifications required under the RDR rules.
In terms of payment for our services, there will be no changes to the amount we charge for advice, and we are in the process of communicating to clients about how the new rules will work – although we have always been very open with clients about the cost of our advice and how those charges are met.
It should, however, go without saying that if you have any questions about the new rules, are concerned about what they mean or would just like to talk to us about any investment, tax or other financial matter, please do not hesitate to get in touch.
AWP
