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Santander suspends 800 advisers over RDR fears

by Michelle Abrego on Dec 10, 2012 at 10:13

Santander suspends 800 advisers over RDR fears

Santander has pulled 800 advisers from giving investment advice with immediate effect and revealed it is not ready to meet the retail distribution review (RDR) deadline.

The bank said that it will suspend its investment advisers while they undergo an ‘intensive bespoke training programme’ but has not outlined a date for their return.

It said all its advisers have the appropriate qualifications but do not have the training in place to ensure the proper suitability standards or processes.

A spokeswoman for Santander said: ‘Ahead of the implementation of the RDR in January we are taking the time to consider the right solution for all our stakeholders.  

‘As part of this process it was identified that our advisers require additional support and training to meet the expected standards. We will therefore be undertaking an additional intensive bespoke training programme.  We apologise to customers for any inconvenience this may cause them.’

In September, Santander announced plans to launch a restricted advice service for customers with more than £25,000 by the end of 2012.

The news comes after last week’s announcement from Nationwide to suspend its pension advice offering because of uncertainty around the RDR readiness of its proposition.

Lloyds Banking Group has also announced it would drop plans to provide investment advice to the mass market in September.

34 comments so far. Why not have your say?

Jonathan Kirby

Dec 10, 2012 at 10:23

Perhaps all these organisations thought that sense would be seen and that RDR wouldn't happen?

My bet is that they will move to handing out leaflets, watch this space.

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Christopher Petrie

Dec 10, 2012 at 10:24

RDR - the enemy of the banks.

Great opportunities for IFAs next year I think.

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Dec 10, 2012 at 10:26

@ Christopher Petrie - I agree.

Is funny how so many people have stood by the theory that RDR was designed for the banks....

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Paul Barnard

Dec 10, 2012 at 10:37

@Chris & Barman


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John Smyth 3

Dec 10, 2012 at 10:38

@ Jonathan Kirby

Oh! No they won't Jonathan. They will be watching how the market place develops and scrutinising how they can get around regulations. They like us realised long ago that the FSA would be altering regulations right up to and beyond 1st January 2013 so were not going to make any big decisions until the last minute. The FSA, as we all know, had no idea of the unintended consequences of their actions which is why a lot of regulation was and is made up on the hoof.

Their most likely tactic will be to offer as many products as they can on a "No Advice or Simplified Advice" basis with concealed amounts of commission built in. Nationwide are currently doing this with the Axa over 55s rubbish and SJP are doing it with everything they sell. If all else fails they will go back to the post polorisation of buying up or setting up insurance/assurance/wealth management companies of their own.

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Lady IFA

Dec 10, 2012 at 10:38

Why did they leave the decision so late? Hardly fair on the staff.

I agree - excellent opportunities for IFAs next year.

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Gillian Cardy

Dec 10, 2012 at 10:43

Given that suitability requirements and the advice process are just about the only thing that hasn't changed (especially if you can only sell the products manadated by Head Office) one wonders what it is that's so revolutionary about giving financial advice 2013 and beyond that all existing advisers must be suspended for a bespoke training programme which is clearly going to take more than a month to deliver ...

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Paul Barnard

Dec 10, 2012 at 10:45

Which bit has the FSA recently changed that would cause Santander to make this pre-planned strategic coup?

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Jonathan Kirby

Dec 10, 2012 at 10:55

@ John Smythe 3

Precisely my point.

Handing out leaflets, with a nod and a wink, but not giving advice.

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Yaya Toure's wallet

Dec 10, 2012 at 11:11

Didn't the FSA write last week to vertically integrated companies to ensure that they wre not concocting initial fee's which did not properly reflect the actual cost of advice - IT; marketing budget's etc etc....

Perhaps this is why they this week pull their advice offering?

Otherwise for a tied company to state that they are not ready - is that not more a comment about how ready they have ever been to advise clients - in a pre or post RDR world? The same company who were selling 'guaranteed' structured products - guaranteed by one of their own subsidiaries, who could have easily been cut adrift if the guarantee was ever required!

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Dec 10, 2012 at 11:14

The sad thing is, most people who would have had advice from the banks will probably just not receive advice at all through ignorance, and leave their money on 0% interest rate cash accounts.

Really tha IFA industry needs to market itself more to ensure that people know who to turn to to get proper unbiased advice. It is a real opportunity now for IFAs to benefit from the shambles of bank advice that has existed for far too long now.

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Paul Barnard

Dec 10, 2012 at 11:24

@ Yaya - you may have hit the nail on the head! In which case (prepares for incoming) well done FSA.

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Phil Castle

Dec 10, 2012 at 11:50

@ Paul & Yaya, I suspect you are right....

@ Chris Petrie -Whetehr it is good for IFAs or not, we'll just have to wait and see, but iIs it good for the general public though?

The FSA were warned to delay RDR for a year and the FSA stated to the TSC that having a simplified advice syetem was an essential part of the RDR, but there IS NO simplified advice system in place. Without it, it leaves large swathes of people with no defined process, let alone an adviser in order to effect the planning they need.

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Paul Barnard

Dec 10, 2012 at 12:03

But you can't berate the banks for ripping people off over the years then, when they stop "advising", moan that they have stopped providing a valuable service to "large swathes of people".

I run an IFA business, not a CAB.

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Dec 10, 2012 at 12:37

Well said, Paul.

Without any doubt, the general public will be better off without the so called "advice" they have been getting from the banks.

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alan from perth

Dec 10, 2012 at 14:25

having dealt with their "advisers" re a simple cash isa and then having to take them to the ombudsman re their subsequent mistakes on a simple attempt to transfer it to a new product why I am not surprised- I bet that they have be too busy selling or (mis-selling)existing products to bother with training.

Call me cynical but will they be any more knowledgeable after their training or will it be sales , sales and more sales

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David Salmon

Dec 10, 2012 at 15:09

Given that "advice standards" are not really changing with the implementation of RDR, it does beg the question about the suitability of "advice" to date

Either your competent or...........

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Richard Hardy

Dec 10, 2012 at 15:31

Call me Mr Cynical, however, was it not the intention of the FSA to get rid of the small firm and corral the consumer toward the banks. More enforcement in one area, larger cash cow!

The banks in turn would cock-up on a large scale allowing the FSA to obtain an income stream from numerous on-going fines.

Is this response to the FSA by the banks going to say to the FSA 'Hang on, this is not what we intended, where do we get our future income from?' resulting in a subtle change in the middle of next year to let the banks in on the party via the side entrance!?

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Irish Outsider via mobile

Dec 10, 2012 at 18:47

As an outsider looking on at RDR the FSA clearly lacked good judgement throughout this change over. But if institutions such as Nationwide and Santandar are unable to deal with the change one has to wonder how ready IFA's are.

Most importantly though the opptunity this presents must be great and ever so satisfying regardless how short lived it may be.

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Gillian Cardy

Dec 10, 2012 at 19:54

Why assume that big organisations being incapable of adjusting to change means that small organisations are equally incapable??

IFAs have the lowest levels of complaints and upheld complaints, and they have the highest levels of confidence in their advice. They are nimble, close to their clients, not hamstrung by multiple layers of management and able to treat their clients as the individuals.

What's not to like??

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Gordon Youmg via mobile

Dec 10, 2012 at 22:28

You IFA's really think the sun shines out if your backside's. RDR is a shambles for the whole industry but according to you lot IFA's are the cream and Banks and Building Society staff are all just sales people. No interest in clients they have seen for years!! Total nonsense and you lot may may regret your gloating shortly...

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Rob Ritchie

Dec 10, 2012 at 23:14

Gordon Youmg, strange surname, or is it just a typo and should have been Young. The same typo possibly that the banks made by putting a tick in the box for PPI, Billions of pounds later. Been in the industry for 25 years and never had a complaint aginst my name, I think it might be that I double check EVERYTHING I do, and I never gloat. Great forum.

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Gordon Young via mobile

Dec 11, 2012 at 02:20

Grow up mabozza..PPI was sold by banking advisors.. I'm an IFA never had a complaint against me.. I never GLOAT..

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David Hatton

Dec 11, 2012 at 02:43

Even more brilliant my dear Penfold!

Don't the FSA look rather isolated now with support for their RDR baby dropping like fly's, it's a pity the spineless institutions didn't stand up & be counted years ago. (Emperors clothes rhyme springs to mind)

Gone or significantly reduced advice offerings from HSBC, Barclays, Lloyds/ Hbos, RBS, Nationwide, Santander along with numerous life office advisers culled over the last 10 months when reality is begining to trip in.

That's without the smaller firms advisers bailing out!

Anyone with a brain cell could/did see this coming but did anyone in the nursery listen ? Where are the positive customer outcomes going to come from now Mr Sants if no ones there to provide & no ones prepared to pay!

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Paul Barnard

Dec 11, 2012 at 08:01

Can no-one use the apostrophe properly anymore? Sigh.

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anthony hewkin

Dec 11, 2012 at 13:24

Having met a number of the management team from Santander recently I'm not surprised there not ready ?? Discribing their RDR model was quite a challenge, now I understand why !

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Dec 11, 2012 at 13:51

Never mind the apostrophes, Paul. I can count on the fongers of one hand the number of posts without glaring spelling and / or grammar errors.

Maybe these people have clients who do not mind semi-literate communications.

(Yes: "fongers" was deliberate!)

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Paul Barnard

Dec 11, 2012 at 14:12

@Alwaysright - my thoughts too.

@Anthony Hewkin - we meet again!

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financial miss

Dec 13, 2012 at 22:25

Definitely not fair on their staff (or customers) - wonder if "not being RDR ready" is the real reason for them to put the brakes on advice.

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A Pain via mobile

Dec 20, 2012 at 13:09

Santander advisers were taken off the road 12 months ago because they could give suitable protection advice. Good to see nothing's changed in one year - not that I didn't tell them so!!

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A Pain via mobile

Dec 20, 2012 at 13:44

Sorry - that should have read COULD NOT give suitable protection advice. Last year their 'intensive training' was 100 PowerPoint slides and a not robust enough competency sign-off procedure!

They will continue to sell volume and customers will not receive good advice, so if they charge investment customers, it will have to represent the poor quality advice given by so many of their incompetent advisers.

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Gillian Cardy

Dec 20, 2012 at 14:13

Where merely goes to prove this story is not about RDR - it's about advice standards ...

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Gillian Cardy

Dec 20, 2012 at 14:14

My mistook this time : WHICH only goes to prove ...

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financial miss

Dec 20, 2012 at 19:49

Gillian Cardy is exactly right - they carried out some mystery shops and found some advisers were not following correct procedures, hence the decision to pull them all off the road for retraining.

I'm thinking if people don't pass their assessments they will be "managed out" - saving a lot of potential redundancy payments.

Or maybe I'm too cynical.

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