Four-hundred-and-fifty British advisers have lost their jobs as the FOFA-style Retail Distribution Review (RDR) results in yet another retail advice offering closure.
AXA UK has announced it is ceasing its partnership with the Co-operative Banking Group and NAB-owned Yorkshire and Clydesdale Banks for the provision of face-to-face financial advice services in retail bank branches.
The company’s UK chief executive Paul Evans expressed regret at the job losses and consumer inconvenience the move would bring about, citing regulatory pressures as the RDR reforms force more service providers out of the advice space.
"AXA UK remains a strong advocate of consumers being able to access affordable advice for their particular investment needs,” Evans said.
“Following similar announcements by major retail banks, we are very disappointed that AXA UK must also now withdraw this service having not found a model which balanced the regulatory requirement that the service be profitable in its own right, whilst setting advice fees at an affordable level.”
Evans explained that the decision would result in 450 job losses and that AXA UK is currently in discussions with other bank partners and relevant trade unions to minimise the fallout.
The move follows the National Australia Bank’s announcement earlier this year that its UK banks would wind up their internal financial advice units, mirroring moves by retail banks HSBC and Lloyd’s TSB.
Deloitte predicted the widescale exodus from the British retail banking advice market in a report on the RDR reforms released in November 2012, in which the professional services firm anticipated the emergence of “advice orphans”.
“The changes mean that there will be up to 5.5 million disenfranchised customers who will either choose to cease using financial advisers or lack access to them,” Deloitte consulting partner Andrew Power wrote in the foreword to the report.
“These customers, who account for 11 per cent of UK adults, will represent a significant post-RDR advice gap.”
NAB CEO Cameron Clyne told ifa in March that similar cuts were not expected for the Australian wealth management business.
SUBSCRIBE TO THE IFA DAILY BULLETIN
- 23 Jan 2019Adelaide adviser permanently banned from industryBy Eliot Hastie
- 23 Jan 2019Bowen slams ‘woeful’ handling of royal commissionBy James Mitchell
- 23 Jan 2019Gender super gap lower but still at 34%By Adrian Flores
- 22 Jan 2019Advice issues stem from writing of SOAs, says RafteryBy Adrian Flores
- 21 Jan 2019Federal Court winds up CFS Private WealthBy Eliot Hastie
- 22 Jan 20192.44m Aussies suffer from financial stressBy Sarah Simpkins
- view all