Money: Beaten by a branch

ISABEL BERWICK Personal finance writer of the year
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The Independent Online
So Abbey National is to charge pounds 5 every time its customers want to pay their bills over the counter at one of its branches. The bank didn't (surprise, surprise) send out these glad tidings in a press release. It simply plans to tell customers about it as a footnote on bank statements.

The pounds 5 charge includes all utility bills and other third-party credit payments, such as credit cards issued by other banks.

This will, of course, reduce the numbers of irritants (formerly known as customers) holding up branch staff from their more important duties of trying to sell mortgages, ISAs and other financial services that actually make money for the bank.

It's an audacious move, but the Abbey has a history of boldly going where no other financial institution has gone before. Cast your mind back a decade: on 12 July 1989, Abbey National became the first building society to turn into a bank.

In the run-up to the Bradford & Bingley conversion vote last month, Abbey issued a bullish statement calling itself "the most successfully converted building society" and explaining what that means to its customers. Apparently the benefits include "reduced branch queuing". Banks have to be more ruthless about profits than building societies. Too bad for older people and the less well-off who pay bills using cash and who don't have the clean credit scores required to live in a paperless, cashless world.

Other banks will be watching to see how Abbey's move (due to start in August) goes down with customers. They all want to cut their overheads by moving routine current account management on to the phone or the internet, with all bills paid by direct debit.

The bank branch isn't doomed, but it is on the sick list. In five years' time we are likely to have fewer, bigger branches which are just advice and financial sales shops.

WATCH OUT for a pounds 27m advertising campaign coming soon to a television near you and trying to encourage you to buy investment trusts.

Investment trusts are just a way to buy shares but they suffer from being poor relations to their glitzy rivals - unit trusts and Oeics (unit trusts that have morphed to become Euro-style funds).

There was some huffing and puffing about the cost of the ad campaign from the old buffers at the industry's annual dinner last week but the forward-thinkers are right: most normal people look blank at any mention of the stock market and any attempt to popularise it is a good thing.

Investment trusts are particularly worth knowing about because they are much cheaper than unit trusts and Oeics. They pay little or no commission to financial advisers, so (guess what) the advisers paid on commission tend to push customers towards unit trusts. The big unit trust managers also tend to have a lot more cash to spend on ads than their investment trust rivals.

Read more about how to invest in investment trusts tax-free, through an ISA, on page 11.