Barclays reviews advice suitability at shuttered financial planning arm

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Barclays is reviewing the suitability of advice formerly given by its financial planning business as a number of customers have already been offered redress for unsuitable recommendations.

Several thousand clients have been sent compensation letters, according to reports, after a review of investment advice over the six years to 2011.

A Barclays spokeswoman told Fund Strategy sister publication Money Marketing issues affected only a “relatively small proportion” of clients.

Barclays announced it was shutting its advice arm, Barclays Financial Planning, in 2011, taking it out of the retail market. It continued to operate Barclays Wealth as a private client business however.

Former regulator the Financial Services Authority gave Barclays a £7.7m fine at the time for failures relating to the sale of the Aviva global balanced income fund and the global cautious income fund.

Barclays had paid out £17m in compensation, but was facing further payments of up to £42m, according to the FSA.

Leaks of fact-finds from former clients to alternative investment promoters surfaced in 2014.

However, Money Marketing understands that, to complement the launch of a direct-to-consumer platform, Barclays Direct Investing, in November, Barclays is looking at a “hybrid” play in the retail investment space that would combine face-to-face advice with online services.