One of Australia’s big four banks has shut down the financial advice units of its UK subsidiaries, fuelling speculation that the country’s FOFA-equivalent reforms are leading to an ‘advice gap’.
The Yorkshire and Clydesdale banks, which are both owned by the National Australia Bank (NAB), will both cut the advice offerings of their business and private banks, with 130 job losses.
UK wealth management firm Iridium Financial Services has issued a statement, questioning the wisdom of the move and what it says about the trajectory of the UK advice sector.
“One has to ask whether Yorkshire and Clydesdale are at risk of throwing the baby out with the bathwater,” the blog post read.
“Whilst following suit with a number of other high street banks, there is a strong and growing level of opinion that says this customer base is the bank's heartland and the cessation of advice – notice period or no notice period – will have a long-term detrimental affect on the level of customer engagement and relationship,” it said.
The statement questioned whether an ‘advice gap’ has emerged in the UK in response to the Retail Distribution Review (RDR) – the suite of reforms akin to Australia’s Future of Financial Advice reforms, which took effect in the UK in January.
The closure of the banks’ advice units follows a report in InvestorDaily that job cuts across the UK advice sector were projected following Lloyds TSB’s decision to cut 600 financial advice jobs.
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