Martin Bamford’s comments on yesterday’s post about welcoming the end of bad bank advice are borne out anecdotally at least. Bank advice or at least bank distribution was highly profitable before the fines and compensation which in one case at least, so I’m told, completely wiped out those profits for one huge high street bank. As well as illustrating the pointlessness of this bank being in the market at all, it’s also a rough indicator of the sheer scale of what was going wrong and another reason why this form of distribution is becoming a thing of the past. I am still a little baffled that it is beyond the ken of man or indeed the ken of bank manager to devise a safer system for those who insist on buying funds from a bank.
As for Alistair Cunningham’s comments about the banks benefiting from the RDR because of vertical integration, it is a very interesting point. They may indeed. Will they risk another round of brand damage for their higher end services though?
I would like to think, for example, that HSBC will be determined to stamp out any risk of misselling. I also think the Risk Conduct Risk Outlook shows the FSA/FCA raising its game on monitoring the market. I suspect they will listen more intently to the good financial planners out there if they raise the alarm about bad practice though of course it could prove to be another case of regulatory good intentions that fall by the wayside.
Finally, as I wrote a few weeks back if private banks and similar services do keep messing up, then I’m convinced well positioned advice businesses can steal market share. Maybe not everyone, but some advisers may trully succeed in moving upmarket.
P.S. here is the link to the weekly trade news round up on the Adviser Home website which is “simply wonderful” according to a bearded, horn rimmed, Edwardian styled East London hipster I walked past the other day unless he was discussing his hipster chum’s three quarter length lilac coloured trousers which I must admit is also possible.