Lloyds Banking Group Revamping its Financial Advice Arm

23 Feb

Lloyds Banking Group has announced it’s planning to revamp its direct financial advice arm. This is in relation to RDR .

What is the Retail Distribution Review (RDR) – this is a key part of the consumer protection strategy being introduced by the start of 2013. It is establishing a resilient and effective retail investment market, where consumers can have confidence in the advice and help they receive through financial advice on retirement and investment planning. 

In preparation for the RDR, Lloyds Banking Group is the latest bank to change its’ offering. They have stated they plan to split the offering between basic protection advice and a “financial planning” service. They have not confirmed if this will be provided by sales people or if they plan to offer an advice service (other than in name).

Lloyds currently operates an advice/sales team offering investment and protection products across its branch network, which includes Lloyds TSB, Halifax and Bank of Scotland.

 Lloyds refused to disclose details of the current size of its branch staff network dedicated to financial product sales but under the new structure the number of staff dedicated to this area of their business is expected to grow.

They have published, no decisions have yet been taken over how to charge customers for its financial planning service. Although, Ernst & Young suggested banks would have to charge clients at least £200 an hour just to cover costs after the RDR. (Assessment and report was in 2011.) Personally, assuming Ernst & Young’s figures are correct, this raises a concern how much will banks’ charge to offer financial services products to their customers.

A Lloyds spokesman says: “Customers require advice and support to understand and make decisions about their financial future and we are very well placed to take advantage….”

“As the IFA sector moves up market, there will be significant opportunities for bancassurers….through their high-street branch network.”

Last year Barclays closed its advice arm while HSBC cut 460 “financial planning managers” due to the RDR.

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