Editor's comment: A new kind of bank?

When is a bank not like a bank? When Richard Branson is involved it seems...

His Virgin Money group this week began its assault on the UK retail banking sector with the purchase of regional bank Church House Trust.

The acquisition gave the UK's most well-known entrepreneur his much needed banking licence. This will allow him to build up his presence in this sector, including a possible take-over of some parts of Northern Rock.

So should the banking sector be scared? Yes, if they listen to the words of Virgin Money CEO Jayne Anne Gadhia who said the group would be in a position to provide consumers with a different type of banking experience.

This appears to be long overdue according to many advisers. They are the ones who frequently have to pick up the pieces when a former bank client comes to their door who has been mis-sold a product they didn't understand and is now failing to perform.

Most people's experience of visiting a bank at the moment appears to be mainly about being on the receiving end of a hard sell on products-never mind if they are needed by the customer or not.

The last time I went into a bank was simply to change my address but this seemed almost an impossibility to achieve in a lunch break. Did I want to change my home insurance? Did I need life assurance? Again I was offered a huge loan if I needed one complete with a well above average interest rate.

Commenting on Virgin's plans, Defaqto banking analyst David Black told the Telegraph Virgin is keen to expand its repertoire of products and new customers.

However, before it just tacks on more and more products and extra confusion for its advisers perhaps it should pause to consider how well it is meeting consumer needs as well as TCF requirements.

Although it is likely Virgin will start building its banking empire online, it could also start to plan its High Street presence soon. This will mean it has to offer a very different service to clients built more around financial planning than merely selling products.

Traditionally, this is an area where IFAs have excelled and the banks are still playing catch-up. It remains to be seen if Virgin can take all the criticisms of the UK's existing banking giants on board and really come up with something different.

Katrina Baugh is editor of Professional Adviser and IFAonline.