The casualties of the RDR are mounting as more high street banks shut down or scale back their advice business. According to data released by the FSA, number of bank advisers fell from an estimated 8,658 in 2011 to 4,809 in Dec 2012, a staggering 44 percent! Add to that, hundreds of advisers who will join the casualty toll as AXA announced its withdrawing from advice offered through Yorkshire/Clydesdale Bank branches and HSBC’s announcement this week that it's scaling back its advice business.

The other casualties are the millions of bank advice customers are in effect left hanging dry by the banks. These people now have investments, which often includes ongoing trail and are in effect paying for advice they aren't getting. While advice given ban banks tend to be poor, one wonders if no advice is better than poor advice.

Off course the rules around legacy business allow pre RDR trail commission to continue, but one wonders if banks exits could have been better managed to better reflects their customers' interests, for instance selling off segments the ‘customer bank’ to IFA firms? Or put an arrangement in place with local IFA firms to take on the clients? Clearly the clever people at the banks decided it’s more profitable to keep creaming off their trail and leave the clients to hang out dry.

Nonetheless here are huge opportunities for IFAs here to take on some of the customers that have now been ‘orphaned’ by the banks. The challenge is that there are reasons why these customers were taking advice from the banks in the first place – proximity, perception that the ‘free’ advice and the misplaced ‘trust’ in a big organisation. So, IFA will have to do a lot to be visible in their local areas and demonstrate that advice is worth paying for. Oh and, that they aren't not going anywhere any time soon because there's a business to run and clients to look after.

As to the 5000 or so advisers who have lost their jobs. Where are they going to go? I wonder if there’s enough capacity within the adviser firms left to accommodate these advisers?