Santander is considering expanding its investment advice arm so its advisers can recommend products not sold by the bank.
Santander, which was hit with a £12.4m FCA fine for misselling within its investment advice division less than two years ago, this week confirmed that it expects to employ 225 investment advisers by the end of March.
The advice service, which Santander has been rolling out since January last year, is at present restricted to the bank’s own products.
However, with the bank also set to launch its own investment platform in the coming months, it is now reviewing the restrictions it places on its advisers.
A Santander spokesman says: “We will have an open platform with 2,000 funds on it which customers can go into regardless of how much they have got with us, and then we have financial planners who at the moment can only offer advice on Santander products. We are looking at ways we integrate those offerings more going forward.”
The bank would not confirm whether it is considering launching an independent advice offering as part of the review.
Tilney Bestinvest managing director Jason Hollands says questions remain over whether banks can be trusted to give unbiased advice. He says: “Many high street banks exited when RDR was introduced but now they expect to take those customers back. It is very hard to believe.”
Yellowtail Financial Planning managing director Dennis Hall adds: “Banks always want to see positive returns in terms of profit that they can deliver to the business sectors, which means they sometimes get caught up in short-termism which can lead to bad consumer outcomes.
“But if they can take a longer-term approach, build a long-term fee model and are not too greedy about it, this could be a good thing.
“Clearly we need more advisers in the marketplace to satisfy the number of people that need advice but it would be a shame if they could only track the [high-net-worth] space and not add more consumer-based clients.”
The one-off fee for Santander’s existing investment advice service is 2.5 per cent, with a minimum charge of £500 and maximum charge of £3,750.
The platform will carry an annual management charge of 0.35 per cent.