The Abbey axe is hovering over Scottish Provident with 700 jobs in Edinburgh at risk, according to a leaked Abbey document.
An announcement is likely to be made to staff this week on Abbey's current review and its effects on the Edinburgh-based life insurance operations.
Around 730 people work in customer operations at the Edinburgh ScotProv offices and it is believed that the majority of jobs could be scrapped.
Abbey for intermediaries media relations manager Christine McAllister says: “We cannot make any public comment on these rumours as we have committed to telling our people first of any decisions about the future of our UK sites.”
She adds that Abbey is undertaking a review of all its sites, including transferring work from smaller centres to bigger ones, cutting down on duplication of roles and sending some operations offshore.
Alan Steel Asset Management consultant Alan Adam says: “This is just par for the course. Most companies are cutting back on staffing levels and wanting IFAs to do business with them but not giving them the support. I think Abbey is just another insurer with a mandate to make profits rather than to provide customer service.”
Direct Life & Pensions sales and marketing director Richard Verdin says: “It is inevitable. But it is promising that other offices in the area are growing and, from an intermediary perspective, I do not think we should see an issue.”
It is understood that Abbey is in talks with US financial group State Street to outsource management of all its funds although Britannic Asset Management is also thought to be interested in buying its fund management arm.