Banking black cloud's silver lining.

INDEPENDENT financial advisors have seen a silver lining to the meltdown in the banking system, according to the biggest independent firm in the North-east.

Guisborough-based Karl Pemberton, a former banker who heads up a team of 14 advisors working from Newcastle to Leeds, said banks were still finding "excuses not to lend" to business, despite upbeat figures from the British Banking Association, which recorded an overall increase in the stock of lending to small businesses of 5% in March compared to a year ago. However the banks' loss had been IFAs' gain with a rush of frustrated commercial clients boosting their books over the past few months, said Mr Pemberton, director of Active

Financial Services.

"There are certain banks that are not in the new business market - although they would never come out and say that. But there are people out there who will do business and we know who they are. It's knowing who's in the market for what at what time.

"If you want development funds you go to this bank; if you want to build your property portfolio, you go to that one ... but to the man in the street, that's not obvious." He said the Bank of England was right to look at separating banking operations and making the system more transparent for customers.

Meanwhile, 2009 was "a year of opportunities" for IFAs who were looking to build their commercial client portfolios. They were also benefiting from an increase in the number of private investors looking for safe alternatives to standard pension stocks.

Like many colleagues in the independent sector, though, Mr Pemberton said AFS was unlikely to become involved in the Government's new personal pension accounts (PAs), due to be introduced in 2012, which would require every adult to take out a plan, relieving the bill on the Treasury.

He said personal accounts would see a mass exodus from the bottom tier of the pension market by IFAs whose earning potential would be restricted by FSA reforms and relatively low value of PAs..

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NEW CHANCES: Karl Pemberton of Active Financial Services in Guisborough looks at the silver lining in the banks' problems Picture by IAN McINTYRE