Banks axe investment advice for small savers

The imminent implementation of huge changes to the way consumers pay for financial advice is driving high-street banks to remove investment advice services for those with smaller savings or investment pots.

In accordance with the Retail Distribution Review, from next January financial advice must be paid for by the consumer in fees rather than commission from product providers in a bid to boost transparency and professionalism. This has lead many banks to only offer advice to those with significant net assets to invest.

Last week, Lloyds Banking Group announced it was axing advice for those with less than £100,000 to invest, and Santander has announced that from later this year it will only advise those with savings of at least £25,000.

Barclays axed its consumer financial planning business in January 2011, as the long running regulatory revamp made its presence felt, although it continues to work with high-net-worth individuals via Barclays Wealth.

HSBC and Royal Bank of Scotland have already decided on huge cuts to their advice services in order to drive business while adhering to the new rules.

The average UK household has just £1,228 in savings, according to recent data from Aviva.