N&P has written to customers explaining that from today their financial advisers will no longer offer whole of market independent advice.
New business from existing customers has also been put on hold until the end of the transition period on 16 March, when N&P staff will refer all customers to an Aviva adviser who can only recommend Aviva products.
Aviva will pay N&P commission on all future product sales by its in-branch advisers as part of the “introducer partnership” between the two companies.
The building society’s exit from the advice market comes just days after Barclays said it is looking to close its financial advice arm, Barclays Financial Planning, which employs about 1,000 staff.
N&P and Barclays have both run into trouble recently over claims their advisers repeatedly mis-sold products to the public.
Takeover target N&P is mired in a £10m compensation battle with customers amid claims its advisers mis-sold products in collapsed investment firm Keydata.
N&P says there will be no transfer to Aviva of liability of the hundreds of claims of alleged mis-selling of Keydata products against its advisers.
The building society says the adviser transfer is against a backdrop of higher costs and increased difficulty in providing advice as a result of RDR changes.
“We are seeing huge changes to how advice is offered with significant increases in the expense and difficulty of providing financial services,” a spokesperson says.
N&P, which confirmed last month it was in talks with companies about a potential transfer of its advice network, says it expects other UK IFAs to follow suit and exit the market ahead of the rule change.
Last month, the FSA fined Barclays £7.7m, the highest imposed for retail failings, for poor investment advice linked to the sale of two Aviva funds, and secured £60m in redress for customers.
