In preparation for the new financial advice regime that starts in January 2013, advisers across the country are preparing to dump their unprofitable clients. If you have investments worth less than £500,000, this could be you.
In the past, under the commission-based advice regime, many advisory businesses have been happy to serve a large cross section of society. But from January commission is banned, meaning advisers have to change their business models, to charge clients fees. The added pressures of the new regulatory regime - called the Retail Distribution Review (RDR) - mean firms will have to jump through hoops to make sure that the type of service they offer is particularly suited to their clients.
So a professional adviser who charges £250 an hour is unlikely to take on a client who has £50,000 to invest. Some private banks have set their limits at half a million pounds, managing out wealthy clients who no longer meet their new criteria. Those who have less money are turning to independent financial advisers and high-street banks for advice but these types of advice are becoming scarcer.