Welcome to our new website! Let us know what you think..

Register to get unlimited access to all of Citywire’s Fund Manager database. Registration is free and only takes a minute.

Nutmeg criticises Barclays' handling of sub-500k clients

7
Nutmeg criticises Barclays' handling of sub-500k clients

Nutmeg believes the industry has much further to go to really adapt to the post-retail distribution review (RDR) world and is disappointed by the treatment of smaller clients.

At an event this morning, the online discretionary manager criticised Barclays following news the private bank intends to offer clients with less than £500,000 a reduced level of service as it repositions for higher net worth clients.    

Nutmeg chief executive and former Wealth Manager cover star Nick Hungerford (pictured) said he views decisions like these as an example of how clients are among the big losers from the RDR.

Hungerford said: 'We’ve seen a shift in the investment industry this year as a result of the RDR as companies make clear where their client priorities lie. You only need to look at Barclays’ decision to scrap wealth management services for investors with less than £500,000 to see that.'

He added: 'IFAs have been slower than predicted to respond to the new regulatory guidance but we expect to see many more businesses restructuring in 2014. Sadly this delay is not one caused by a client- centric mindset, rather the fact that advisers can eke out trail commission (fees often hidden from clients) for one more year.' 

Hungerford is less than impressed by the response from many established financial institutions, which have shown they are unable or unwilling to restructure to help less wealthy investors.   

'There are millions of UK savers out there looking for an intelligent investment service. But not many companies are filling the so-called ‘RDR advice gap’, Hungerford said.

'To us, deciding that people with £450,000 are too poor to be worthy of an expert investment service smacks of hubris and reflects incredibly inefficient operational processes.'

Hungerford expects to see more overhauls of business models next year,as regulation takes its toll, but believes some will try to squeeze out as much commission as they can for as long as possible.

'We will no doubt witness a lot more businesses restructuring in 2014, but we expect the independent financial advisers to continue to drag their heels. They’re reluctant to change and won’t do so until trail commission is taken away.'

Leave a comment
Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play BlackRock UK Special Sits: when will we sell our star holdings?

BlackRock UK Special Sits: when will we sell our star holdings?

What would prompt Roland Arnold to sell the likes of Ashtead and Howden?

Play AA-rated Lofthouse: 'maverick' tobacco settlements won't stop M&A

AA-rated Lofthouse: 'maverick' tobacco settlements won't stop M&A

Henderson International Income trust manager Ben Lofthouse shares his thoughts on recent developments in the tobacco sector in this video.

1 Play Renewable energy: what I found on my solar farm trip

Renewable energy: what I found on my solar farm trip

Renewable energy is attracting a lot of investor interest, so I headed to the UK's largest solar farm to find out more.

Your Business: Cover Star Club

Profile: how Matthew Butcher is carving a new role at Dart Capital

Profile: how Matthew Butcher is carving a new role at Dart Capital

The wealth management industry is undergoing a profound period of change: whether it wants to admit it or not.

Wealth Manager on Twitter