London - Barclays has stopped giving investment advice to customers with less than £100 000 (R1.6m) to invest, the Telegraph
reported on Sunday.
The bank said the move to shut its investment services was a result of new rules that effectively ban financial advisers from taking commission and are designed to make the financial advice market fairer.
These regulations came into force in January this year, the report said.
The latest move follows a string of measures to restore the bank’s reputation and pave the path to profitability after the British lender was rocked by an interest rate rigging scandal last year.
Barclays was fined $450m for manipulating interest rate benchmarks.
Shortly after the fall-out the bank brought in chairperson David Walker and CEO Antony Jenkins to streamline operations and overhaul the culture of the three century-old bank.
In April this year, Barclays posted a drop in adjusted pretax profit for the three months through March to £1.79bn from £2.4bn a year ago, citing a hefty bill for the cost of a restructuring plan had offset a solid performance by its investment bank.
Profits were dented by a £514m charge to cover costs associated with "Project Transform", Jenkins' plan to axe 3 700 jobs, prune the investment bank and reform the bank's culture after a series of scandals.
Jenkins is attempting to distance Barclays from the aggressive, high-risk culture championed by his predecessor Bob Diamond.
Most of the costs incurred so far were in its European operations, where it has cut almost 2 000 jobs, and the investment bank, where it is axing 1 800.
The investment bank made a profit of £1.3bn in the first quarter, up 11% on the year and accounting for almost three-quarters of group profit.
Barclays' latest move will, however, fuel fears that only the wealthiest investors will now be able to afford financial and investment advice, leaving many ordinary investors on their own, according to the Telegraph.
The bank said its decision affected just 1% of its total customer base, although a significant number of its wealth division's customers are thought to be affected.
According to Barclays customers with less than £100 000 to invest weren't benefiting from sufficient diversification of their assets.
- Telegraph / Reuters / AFP
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