C&G closes branches to intermediaries

Lloyds Banking Group has announced that C&G will exit the IFA market and from the end of this month only accept applications from consumers direct. Lloyds Banking Group states that the reason is that having a number of mortgage brands that they wish the C&G brand to be focussed on selling direct to consumers. This follows on the heels of Barclays stopping having advisors in its branches due to the costs of meeting the Retail Distribution Review (RDR) (see http://www.itsafinancialworld.net/2011/02/will-rdr-see-end-of-advice-in-bank.html ), the Co-operative selling its IFA business and Norwich & Peterborough transferring its advisors to Aviva.

Is this the beginning of the end of advice for the mass market in branches? Whilst there has been a significant drop in the numbers of UK consumers using bank branches, the most likely reason behind the C&G announcement is to do with tidying up C&G as part of the forced disposal LBG has to do as a result of taking state funding. Among the 600 branches and associated customers that LBG must sell are the C&G branches, so a cleaner, simpler model will make the sale more attractive and the separation from LBG simpler.

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