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HSBC axes tied advice service- 650 jobs to go

HSBC is to axe its tied advice service in a move that will see up to 650 of its advisers losing their jobs.

The bank is going to keep its whole-of-market advice service and its execution-only service. A HSBC spokesman says around 50 of the tied advisers will be given the opportunity to switch to its whole-of-market team.

In total, there will be 2,217 job losses, with retail bank staff and head office administration roles making up the bulk of the cuts.

Last June, the bank cut 460 adviser roles across the UK in a round of job cuts which totalled around 700.

In January last year, Money Marketing revealed Barclays planned to close its advice arm, Barclays Financial Planning, citing the RDR as its main reason.

HSBC is planning to cut around 30,000 jobs in total worldwide in a cost-cutting exercise that could save up to £2.2bn.

Lloyds Banking Group plans to split its direct-advice arm as part of its RDR distribution plans, with one division offering basic protection advice and other division offering a ’financial planning’ service. Nationwide Building Society is currently piloting a fee-based advice service through its single-tie agreement on investment business with Legal & General.


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There are 38 comments at the moment, we would love to hear your opinion too.

  1. I’m certainly no fan of HSBC but I do recognise them as being one of the better run banks.

    If HSBC can’t make post RDR advice work for the masses then nobody can.

    The government must step in and stop RDR now.

  2. First Barclays now HSBC if they cannot make things work under RDR what chance does an ordnary IFA have. HSBC say that under RDR consumers will seek less advice. This is true because course they will they will not be able to pay the fees etc. If only our arrogant ministers and FSA would listen to the likes of HSBC then maybe we would not be in the mess we are in

  3. Apparently one or two more to follow…..the answer of course is to give advice on a barter basis out of the back of a van in a lay by.

  4. RDR and the attitude of Govt. & FSA remind me of the fairy story about the ‘Emperor’s new clothes’. When will someone in cabinet speak up?

  5. It’s sad that an over-reaction following the banking industry melt-down continues to impact on good advisors and their families purely because the FSA did not listen. Another sad day.

  6. I cant beleive IFA’s are moaning. I am glad to see the back of so called advisers from the bank assurance arm. They caused clients more problems than they solved. Miss selling anyone.
    RDR is not a problem pass the exams which are not that hard, now they are multiple choice in the main and if people can not incorporate fees into there investment and pension products, someone has not explained it to you properly. Clients will have no option but to come to idependant advisers forr good whole of market advice !!

  7. Scott Taylor-Barr 26th April 2012 at 12:04 pm

    Just to play devils advocate and put a slight positive spin on all this…
    The Banks have huge systemic issues with RDR in that the investment in changing IT, training and compliance regimes runs into millions for them. They are taking a commercial view that the time it would take to re-coup this investment is not worth it – they will instead promote FS in different ways (i.e. without advice where ever possible).
    This is however a potential opportunity for smaller FA firms who do not have this scale of investment to make – we can opperate in a sector of the market post-RDR free from competition from the big Banks.
    So maybe not all doom and gloom?

  8. Co-op, Barclays, HSBC, Nationwide outsourcing, Nat West, who’s next ? Where will the plebs go for so called ‘free’ financial advice ?

  9. I don’t see what we are concerned about here. Banks would have to provide proper client service in the post RDR world and clearly they are not equipped to do so. Quality IFAs will be able to step into the breach, especially those who have adjusted their business models. Coupled with the FSA trying to identify which individual in the banks would be responsible for breaches, clearly no one is willing to step up to the plate given the scale of the responsibility they would have to shoulder. Its about time things swung back in favour of the IFA.

  10. So who at hsbc will provide to ongoing service now that tied advice is being closed. I doubt that the bank ifa,s with stiff new business targets will be interested unless they can create any new business? On the upside more opportunity for efficent ifa,s focussed on tcf

  11. Whilst I am no fan of banks and their advisers I am even less inclined to support the RDR experiment.

    David Cameron should put his pen down and turn his attention to this NOW !!!

    People,s lives are at stake here, I disagree that the less there are, the more rich pickings there are for the one’s that are left at a time when people need more advice than ever RDR is cutting jobs / businesses.

    Oh sorry I forgot MAS ignore my rant !!!

  12. Needless waste of good jobs!

    Well done Hector!!

    At around £15,000 to £20,000 a year per head of salary, that’s north of £2 million per year of tax revenue lost, coupled to the possible ensuing drain on state benefits which may result. As you say, Hector, you have much to be proud of.

    And that is from just ONE company!

    MP’s need to wake up and soon!

  13. I think one of the anonymous posts made the point – IMHO many banks have sold ‘tied advice’ as being ‘free advice’ yet from January any advice which results in a charge against a client will be harder (or impossible) to hide away.

    As such, if people are being charged for advice, they will immediately question the value of that advice and potentially realise an IFA will charge a similar (perhaps lower) amount yet will bring independence to the decision.

  14. These nutters at the FSA are ruining our industry, this is only the start. I foresee a number of large networks either amalgamating or just closing up shop post 2012. Hope mines not one, but we do seem to be in a better position than most to move forward post 2012.

    The real problem with RDR is now becoming apparent, it has focused too much on negating the transactional relationship between client and adviser and tried to elevate the advising sector by taking away consumer choice and ultimately what will occur is that the market place of available financial products will shrink as no one will want to be seen to be transactional based any more.

    What’s professional about that?

  15. Just about to e-mail this to my local MP, any input as to additions or changes would be much appreciated, and I will copy the final version back on here, for others who may wish to send it to their MP also…Time for action, the govt need all the good news they can get now!

    I wrote to you some months ago regarding the introduction of the Financial Services Retail Distribution Review at the end of this year and the massive impact that it will have, to the detriment of our sector.

    It is an unwanted and unwarranted agenda being driven by the FSA, who have exhausted in excess of, I believe, £500 million of the industry’s money on this project.

    The EU directive concerning commission bears no parallels to the function of our market and is something that does not need to be adopted in the fashion in which it is to be.

    As a consequence, we have so far seen the major institutions coming away from the marketplace for providing such financial advice (contrary to government aims of financial advice for all!) and in excess of 3,000 job losses stemming from this already, through the likes of Barclays, Lloyds TSB and now HSBC, the former of whom has directly cited RDR as the reason for the losses.

    This amounts to tax revenue of north of £10 million per year, at a time when the UK wishes and needs to create jobs and generate more income for the public purse; and that is without the consequential affect in terms of benefit payments, which may be necessary for those who are, or will be, out of work.

    It is one thing to lose jobs in a competitive sector (as has happened at BAE at Brough arguably) but a complete nonsense to take an industry that is functioning and providing jobs and completely destroy it, without any benefit being gained (the consumer will certainly lose out, as financial advice will now come at an hourly price through a limited resource, something which most just will not want or use!).

    Given the figures, I feel that this is a complete travesty and it is clearly a nonsense that revenue streams are being lost and good people thrown onto life’s scrapheap, because of a selfishly driven agenda such as RDR.

    I hope you can put this to the powers that be and get them to understand…they only have to talk to anyone in the industry who is involved at the front end and they will tell you in so many ways, how incredibly stupid and expensive to all concerned (especially the government), the whole thing is!

    If you wanted to write a headline, how about 10’s of thousands of jobs saved as the RDR is scrapped! I kid you not, it could easily be substantiated…This would be good news that is easy to create and without changing anything!!

    There is a news-site called Money Marketing, and every day, there are people from within the industry venting their spleens about the injustice of this, and never anyone with a good word in favour of it!

  16. According to countless posts on this forum in the past, the banks were the architects of RDR weren’t they?

  17. How many more thousands of jobs will be lost in the quest for RDR.
    I am sure many people can think about what the letters RDR should really stand for.

  18. RDR for IFA’s is an opportunity and not a curse as many on here are trying to portray. I don’t care if many of the banks go to the wall in the area of financial advise, as quite frankly my FSCS are going to be a lot lower because we’re no longer going to have the problems of their TERRIBLE MISSELLING.

    The only thing I seek clarification from, from the FSA is what is the definition of financial advice as the answer to this is key to IFA’s building sucessful businesses in the future.

    I for one am fed up of so called power planners, solicitors, accountants and indeed banks giving financial advice or GUIDANCE without the proper authorisation only for clients to take out products on an execution only basis from this so called GUIDANCE or generic information.

    So FSA if you really want to help rebuild the industry that you have helped remold, then help IFA’s protect their trade by making ALL financial advice regulated.

  19. If you recall the idiot at the helm of the FSA said; it was acceptable for 20% of IFA’s to lose their jobs because of the additional level 4 exam requirements needed under RDR. What he didn’t say was he also knew the banking and mortgage industry would start ditching their tied (employed) staff because they could no longer get away with calling their advice free and the spiralling costs of maintaining a regulated sales force. I am not happy to see anyone in this industry lose their employment and where is the mass media attention when thousands of financial services or bank employees lose their jobs? Do you see anybody making a stink about bank advisers losing their jobs the same way they did when the steel works at Redcar closed? I don’t. This experiment called RDR isn’t just costing IFA’s their jobs its hitting everybody in this industry from mortgage advisers to IFA’s and no one in authority seems to have any understanding of where this is going next. I’m seeing posts on here trying to put a positive spin on this but for the life of me I fail to see how the cause and effect of RDR is going to improve the situation for the consumer or the practitioners within the industry. I just see more costs, more levies from the FSCS, more disillusionment and a whole section of the UK populous that will be excluded from proper financial advice. Spin that if you can?

  20. it is a pity firstly that Roger Miller can not spell possesive noun is not there but their!!

    Also “idependant advisers forr good whole of market advice !!” really ??!! and pigs might fly!!

  21. Tricia Campbell 26th April 2012 at 6:50 pm

    I don’t know how roger miller can say the exams are not that hard. Has he sat the JO or RO CII ones. Maybe not because I can guarantee you they are not easy. Maybe he’s another one who didn’t have to sit them because the old exams he had still covered him with a bit of gap fill.

  22. Please stop tarnishing all bancassurance advisers with the same brush. I pride myself on giving compliant ethical advice to a high standard and where it’s more appropriate to refer to an IFA I do so. I have improved the tax efficiency and wealth of many people planning for retirement or protecting their family who otherwise wouldn’t have considered seeking financial advice. Banks give access to the masses. Many IFAS are just as bad, churning etc so stop being so self righteous!

  23. HSBC won’t be sacking any advisers, but it will be sacking 650 (mis)sales people.

  24. Have just seen a client with funds in Barclays we decided to leave last year. This year it becomes cash locked and kicks out to client…
    I do believe that we will leave the ordinary folks behind and really will we have time and energy to do Pro bono..nice idea but a sop by those advisers who see RDR as opportunity to follow the Law and Medicine proffesionalism, and damn the plebs!

  25. And another thing…remember when some of us did call on ordinary people via Home service companies, yes it was’nt rose tinted and there were rogues but there are rogues now in the IFA world I now inhabit!
    Savings were higher, the banks did what they were supposed to do…And ordinary people connected with finance although they did’nt see it as that.
    We are so sophisticated now , we are moving back to Victorian values…..look after the Mill owner and forget the workers.

  26. Rudolf Schnackenberg 26th April 2012 at 8:46 pm

    Anyone who takes on the role of pushing through RDR will wreck their careers because the whole venture will be catastrophic. What a time to experiment! Changing regulators. Back in recession! Listen to the collective wisdom of parliament. Listen to the TSC. Postpone RDR with immediate effect! Individual regulators. Can you imagine this on your CV? Is it worth the risk?

  27. I was made redundant with Barclays and I have been with a wealth firm that offers financial planning advice through the bancassurance model for a year. We are already RDR ready and charging Fees for investment and IHT planning, no initial fees charged for regular or lump sum stakeholder friendly pensions.
    I did look at the IFA role but most firms want self-employed staff that come in, do all the work and give 65% of the fees away. Also I would turn up thinking I was interviewing for an IFA role only to find out the firm is really tied with 1 IFA. I have an IFA firm working in my town and I can tell you the 3 Multi-manager funds that all their clients have so I don’t believe IFA advice is better in every situation.
    The majority of our advisors have passed diploma and I believe that bancassurance can survive, it’s the smash and grab mentality that has to go from IFA’s and Bancassurance alike.

  28. The person above is clearly St James Place. “Wealth Firm” makes me smile. I’m a former Barclays adviser and have been fortunate to move to a national IFA that has been RDR ready since May 2011. As I am an IFA I am no longer branded a miss-seller. Marvellous logic! I’m still the same honest person as before. I heavily sold collectives at Barclays, and all the clients knew that between 1 and 5% was being deducted from capital on day one. No need to flog a bond. It’s easy, don’t be ashamed of fees or charges, advice is not free and it is what the clients prefer to hear! Honesty! All my ex clients have continued with me as an IFA.

  29. Bank assurance serves a purpose. I have no problem with bank advisers per se, I do have a problem with how highly targeted they have tended to be.
    I remain concerned that whilst RDR has laudable aims, the speed and timing of it’s implentation will not be good for the consumer.
    I contest that teh FSA should have listened to the TSC and agreed a stepped timetable instead of a fixed date cliff edge for each part of RDR.
    Too many unintended consequences have arisen (that some anticipated) and remain to be resolved.

  30. Richard Cupples 27th April 2012 at 2:06 pm

    The sad story of HSBC is one which I sadly feel is going to be repeated by other large bancassurance providers. However, I feel the comments made by alot of the IFAs on this site are very short sighted. Yes, tied advisers have had some well publisized complaints and subsequent pay outs…. IFAs have had just as high a proportion of complaints, but they are not large enough to warrant coverage in the press. Unfortunately, the FSA, as they often are, have been far too short sighted and are now going to cause a problem for the mass market, who need advice on their money but aren’t prepared to pay for that service up front. Well done FSA…. When all the advisers have been made redundant who will there be left for you to govern?

  31. Well I must say at least this thread is more gentlemanly than NMA’s.I think the major consensus is that although most of us are IFA’s we see the merit of other options being available for clients.I have spent 8 years trying to look after my old clients , and in the main i have had to trade up, it pains me really but thats the truth. With overheads as they are its unaffordable for me..more suicide. Everyone pays for every service my brother a plumber does not work for free. Why should we do free work? The moguls in the FSA don’t turn up for work one day in 5 for free!
    Painful as it is I feel that as a one time supporter of RDR in reality it will further disenfranchise the less well of. I only hope we could have an agency in 10 years time that will call up retired and prev FSA moguls to be sanctioned financially and made to sit through a claims procedure against them , oh and our moron politicians….but heh pigs will fly! As we see the last rabble got away with dodgy war calls and the present make more blunders scott free.

  32. Lee Brooke-Pearce 28th April 2012 at 9:48 am

    Clearly in my mind this is good. Finally proving that ‘bancassurance’ never worked anyway (an no it never has) whether it be costs of provision, quality of advice or ability to cross sell or upsell from existing core products. The down side of course is the inevitable march to banks charges. Nothing to do with RDR except that the legislation exposed the economics which needed exposing some time ago. Good iFAs har nothing to fear here and potentially increases opportunities

  33. Ignoring the daft ‘more business for me’ comments for a moment, where, in the plan to offer financial advice to all, does losing 650 jobs help the public? If HSBC thought being an IFA worked then they would have created 650 IFA’s surely? So not much of an endorsement for independent advice. For me, I have no problem with RDR – fees have been the majority of my service for some 15 years. I do have a problem with turning us all into solicitors and accountants. How many people have a solicitor for example? Not many. My experience of fees has been that only the more wealthy can afford it – hence I have aimed for these individuals, and have ‘offloaded’ those that can’t or, more often than not, won’t. This helps no-one other than a small number of IFA’s. If RDR should have done anything it should have made it easier for all to get advice. As it is, advice will be transparent in cost, and available to a very small number of people.

  34. Bank advisers should have never been named “advisers” anyway, they should have just been given their true title, salesmen/product pushers! I hope to see more exits by banks and insurance companies. That way, consumers will begin to understand that if they need advice, a bank is the last place they ought to go.

  35. Why would I pay fees to go to a tied adviser exactly ?

  36. For those who may believe advisers concerns are simply a knee-jerk whining, read these words of wisdom from Jeff Prestridge.

    “Never has there been a more pressing time for households to get financial advice on how they can protect themselves from the horrors of recession.

    It is therefore unfortunate that as a result of badly thought out regulatory intervention by the Financial Services Authority, money advice is being withdrawn from the High Street at a rate of knots.

    Last week, HSBC confirmed it would no longer provide financial advice to most of its customers through its ever-shrinking branch network. It follows Barclays’ decision last year to sack all its branch-based advisers.

    The trigger is the impending introduction of a regulatory regime that will require financial advisers (belonging to banks as well as independent) to charge fees rather than take commission from product providers.

    The change is being introduced because the regulator thinks somewhat tenuously that advisers provide biased advice, recommending products that pay the highest commission.

    But consumers will be big losers from this change because access to financial advice will become more difficult.

    Banks no longer want to offer it while independent advisers will serve only wealthy clients. Another case of regulatory madness”

  37. Some of the posts on here are disappointing. As an unemployed tied adviser, who passed the diploma two years ago and always treated customers fairly, I believe branding the whole tied population with providing bad advice us as bad as racism or sexism. Tied advisers are individuals and should be judged on their individual merits. Some misselling was a bandwagon just like suing for whiplash. RDR is correct in upskilling advisers but banks thinking that customers were not paying for their advice before is plain stupid. All good tied advisers explained this clearly and therefore it should not make a difference post RDR.

  38. Jonathan Allen 8th July 2012 at 6:09 pm

    What a lot of people need to consider is bank adviser get paid a salary, yes bonuses may get paid as well, but at the end of the day they will still get a wage, if they sell to a client or not.

    IFA’s depend on pushing sales to get paid. So you cant claim that all IFA have TCF at the heart of everything they do.

    I recently received 100K, when to a Bank and IFA to compare the advice, the IFA advice was to put it all in a stock market based fund, the bank adviser was to invest 50k in a stock market fund, 10k instant access, 40k into short term depoist based savings.

    who do you think I when with ?

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