SANTANDER is reviewing the future of its bancassurance division after it struggled to train its hundreds of advisers to meet the new regulations around the sector, the bank’s UK arm announced yesterday.
That could lead to the division being closed, joining the swathe of banks cutting back on mass advice as a result of the new Retail Distribution Review rules.
The bank will continue to provide advice to existing investment customers, but has not yet decided what will happen to the rest of that business.
“There is never a good time to announce changes such as this and we are acutely aware of the uncertainty staff are facing,” said a spokesperson.
“We are working closely with other business areas to ensure that many of those who may be impacted are able to secure roles in a growing Santander Group.”
It came as the Financial Services Authority (FSA) released the results of its mystery shopping exercise which found cause for concern in the advice given to one quarter of customers looking to invest a lump sum through a bank or building society – with Santander believed to have been referred to the enforcement division over poor advice and practices.
The FSA said that overall the results of its mystery shopping exercise were disappointing.
In 11 per cent of cases the advice was unsuitable, and in 15 per cent the advisers had not obtained enough information to make a proper recommendation.
The FSA’s survey found three main problems with sales staff; firstly a failure to assess the level of risk customers were prepared to take; secondly a failure to assess the customers individual financial needs and thirdly failing to take into account how long the customer wanted to hold their investment for.
“This review shows that customers are not consistently getting the quality of advice on their investments that they should expect when visiting an adviser in a bank or building society,” said Clive Adamson of the FSA.
“Whilst we are disappointed by the results of this review, we are encouraged by the action that the firms involved have taken to rectify the situation for their customers.”