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HSBC cuts 3,166 jobs in advice arm restructure

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HSBC is cutting 3,166 UK jobs as part of a restructure of its advice arm which will combine all the bank’s wealth advisers within the retail bank division.

The bank says the changes could see a net loss of 1,149 jobs as it hopes to redeploy affected staff into 2,017 new roles.

From 1 June, existing HSBC wealth advisers will come under the bank’s retail banking business. The move will see the role of commercial finance advisers scrapped, as well as 942 relationship managers who do not give financial advice.

The restructure will lead to an adviser team of 853 people. The bank is launching a “wealth learning programme” for employees to wish to become qualified to QCF level four.

HSBC customers need at least £50,000 in total assets to access advice from the bank. 

The bank says the restructure will give customers a single point of contact for advice and banking services.

HSBC Bank chief executive Brian Robertson says: “I  understand change is always unsettling, particularly for those directly affected. However, I also firmly believe what we are proposing is essential in order for us  to fulfil our customers’ expectations.

“With the banking behaviour of our customers continually evolving we must change our business to  meet  their  needs. We are doing everything possible to offer impacted employees  opportunities  from  the  many  newly  created  roles,  and  I am confident a significant majority will remain with the bank.”

The latest wave of job losses come after HSBC axed its tied advice service last April resulting in up to 650 adviser job losses. HSBC converted its whole of market IFA arm to a restricted advice service in December ahead of the RDR.

Last week Axa closed its UK bancassurance arm, resulting in 450 job losses, following similar moves to exit mass market advice from Santander, Lloyds Banking Group and Barclays.

Axa told Money Marketing last week it would had to charge a 6 per cent advice fee in order to deliver advice profitably.

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Comments

There are 27 comments at the moment, we would love to hear your opinion too.

  1. How many more jobs need to be lost before the RDR is reviewed?

    How many more jobs need to be lost before Sir Hector needs to return his knighthood.

    They can’t say they weren’t warned.

    …and remember – this is the big banks. Small IFA’s have yet to hit the buffers to this extend but sadly I do believe it will happen.

  2. What a great selling point for using an independent financial adviser.

    You know that your financial adviser will always be there, as they are reliant on your business, unlike banks et al who close and open advice arms at a whim depending on the profit they can make.

  3. world’s non caring bank – more to come.

  4. Whatever one thinks about their ethics, Banks are there to make money for their staff and their shareholders.
    All the banks are coming to the same conclusion. It is not possible to make money on providing financial advice under the current regime. Given their probable ability to minimise cost by size and by existing client bank, it should be making advisers think carefully about their business model.
    Many advisers believe they can prosper in the new regime, but it also true that a sizeable number of those advisers are not too bright at running a business as recent history has demonstrated. It would not surprise me to find that many are deluding themselves about the real cost of running their business in accord with ever changing FCA rules. To assume that financial advisers will always be there is the ultimate ostrich manoeuvre.
    The irony could be that advisers train clients to accept significantly higher fee levels, and the banks then come back into the market, based on those higher margins.
    In the above analysis I have totally excluded the possibility that either the FCA or Parliament will raise any questions about the practicality of the existing regulatory model. After all a decline in complaints must be a positive result – even if that decline is caused by an extremely low take up in financial products.Whatever one thinks about their ethics, Banks are there to make money for their staff and their shareholders.
    All the banks are coming to the same conclusion. It is not possible to make money on providing financial advice under the current regime. Given their probable ability to minimise cost by size and by existing client bank, it should be making advisers think carefully about their business model.
    Many advisers believe they can prosper in the new regime, but it also true that a sizeable number of those advisers are not too bright at running a business as recent history has demonstrated. It would not surprise me to find that many are deluding themselves about the real cost of running their business in accord with ever changing FCA rules. To assume that financial advisers will always be there is the ultimate ostrich manoeuvre. The provision of financial advice is a commercial process. If its not possible to make a reasonable living, and live without constant fear, people will chose other avenues of work.
    The ultimate irony could be that advisers train clients to accept significantly higher fee levels, and the banks then come back into the market, based on those higher margins.
    In the above analysis I have totally excluded the possibility that either the FCA or Parliament will raise any questions about the practicality of the existing regulatory model. After all a decline in complaints must be a positive result – even if that decline is caused by an extremely low take up in financial products.
    Its the continuing story of fairy tale finance.

  5. Roman Duzinkewycz 23rd April 2013 at 2:27 pm

    RDR will not be reviewed in the way I think you mean it (Soren Laurenson). We have now gone too far down this route to change it but I guess that, should ever there be an appointment of someone with some sense in the position(s) that can effect change, it will be ‘amended’ to suit. I still don’t understand why Mr Sants has managed to get away with it – disgraceful and we are now seeing the results and, it will get worse!

  6. Stephen Rowland 23rd April 2013 at 2:33 pm

    We used to be the envy of the Financial Services world. Now we are a total (or will be soon) a total shadow of it’s former self / glory!

    What have we got now – so say qualified IFA’S doing relatively less than before (middle england wise) & pandering for HNW clients that are generally not enough to go around!.

    Middle England has basically been told (advice wise) to **d off & do it yourself – mainly by the means of the internet, as they cannot afford anything else. This especially now as the Banks are pulling out in big numbers and even they with their relatively huge size cannot make a profit!

    Where will it all end? Surely even them in their IVORY TOWERS can see what is happening!

  7. After years of ripping off their poor customers, nobody should be frightened that the banks are now pulling out of financial advice.

    No advice is far better than bad advice.

  8. Only when there are insufficient funds to keep the regulator in the style to which it has become accustomed, posh office accommodation,expensive works of art, huge salaries, bigger bonuses, sky high pension payments, gardeners world of moneypots, etc etc ad nauseum, will there be a review.
    By then it will be too late but no doubt those that be will claim success in the form of zero consumer detriment

  9. ….and Nationwide are trying to convince their advisers that their jobs aren’t at risk? ….dream on….

  10. Just been to see a client who does not wish to pay a fee so no advice. When will this end Average man in the street is now not in a position to get advice forget about them going to an IFA/financial adviser as they cannot pay up front. Well done Sants and team you have ruined the advice market and get a gong for doing so. What a shambles

  11. @ IFA
    “No advice is far better than bad advice”

    Really?

    No advice means clients do it themselves and when it all goes wrong they are on their own.

    With bad advice you can complain and get your money back because there’s an effective remedy called the FOS.

  12. More lives ruined needlessly.

  13. Re anon 3.08, you are right, only when the regulators funds dry up because there won’t be enough regulated firms to fund their gravey train will they realise what they have done!
    Still when the FCA have to make their staff redundant they will get gold plated pay offs funded by the few IFA’s left

  14. If the Nationwide change to HNWC model it will be game over for mass high st investment advice and a big hole in regulation fees required by the FCA

  15. The changes being made at HSBC will result in significantly more qualified people giving advice not less. The relationship managing staff being demised are being replaced by doubling the number giving advice so the IFA’s crowing again about this being good for them may want to think again.

    This is about HSBC trying to take market share off IFA’s not about them giving more away

  16. I believe that RDR is long overdue and something the Govt should have introduced a long time ago. The entire industry has been ‘milking’ the system and their clients for far too long and as a result the same advisors who were once able to hide behind complex charging structures, are now complaining about having to be more transparent!!
    I always laugh when I read how financial advisors believe they provide an invaluable service to the general public, without which the world would come to a stand still, and people would be much worse off. These are the same FAs who can justify taking up £4k commission on a £100k lump sum investment, for doing perhaps 10 hours work (£400 per hour, my GP doesn’t get paid anywhere near that!!)….not to mention the trail fee for providing on ‘ongoing’ service (in other words you will pop round once a year with some graphs that you don’t really understand yourself).
    If only the general public knew what really goes on within the industry, it would make the PPI scandal look like a school boy error!
    Finally, I really feel for all those hard working IFAs out there slogging their guts out to make our lives more secure and prosperous. Unlike the banks you do this type of work to help your fellow man, nothing at all to do with the large upfront fee’s, trail commission and advice fee’s you’re able to charge for the hours and hours of painstaking research you carry out on behalf of your clients (it’s called sarcasm)……wake up, your all the same, in it to line your own pockets as quick as you can without giving a hoot about your clients are their wellbeing……….

  17. Job well done – all IB insurance companies gone – most OB companies gone – most Bank advisers now gone – IFA’ to follow?
    Who cares?
    No one – who will suffer – our nation who cannot get advice!

  18. Plain and simple

    RDR is just the catalyst for the biggest constuctive dismissal plan ever dreamed up.

    I fear it may be working to well ?

  19. @ Grey Area

    IFA is a broken record !

    RDR is a total failure just 4 months in Banks know it its just IFA and his like aint worked it out yet

    It is only a matter of time before the providers (and I include banks in that) kick back claiming restriction of trade (I know I sound like a broken record now) and commission (the FEE for marketing a product) comes back in some form or another. The salesman YES salesman needs an incentive to sell and the customer needs to be sold to however unpalatable that might be to some !

    The new model fee based wealth adviser is a theorist and in my experience (although there are exceptions) are nowhere near as good or successful as they think they are and are certainly not making fortunes. I came across a CFP recently who was earning £25,000 a year !! I wonder why his like have such loud voices when telling everyone else how to do it !! funny that !! As far as I am concerned free unfettered markets decide who succeeds (commission or fees) and who fails (that’s how it should be) so if IFA or whoever wants to charge fees – crack on just don’t tell me or my clients what we should be doing and a quango regulator has no role in that it is between the grown ups that are party to the transaction.

    Nobody condones bad advice but as many have said before, you cannot re-invent the wheel no matter how much some might like the idea. This whole sorry experiment is not so slowly proving it !

  20. Morning Derek

    I’m sorry not to have yet worked out that RDR has killed off my business.

    I’ve been a little too busy servicing my clients and indeed writing new business, all under the new RDR rules.

    I can only speak as I find – and it appears most of our clients just shrug when I tell them the new, more transparent, way of working. It seems most of them wan’t to carry on working with us, so that’s fine by me.

    And if all these dodgy banks stop giving bad advice, that will help us all won’t it?

    p.s. @ Grey Area. I just can’t believe you’re saying bad advice is better than no advice – would you still be saying that if your own mother had been stitched up by a bank flogging Aviva Adventurous funds as “low risk” savings etc etc? I suspect not.

    p.p.s @ Derek – check Grey Areas post – he really IS condoning bad advice – because WE (via the FOS/FSCS can pay for the messes to be cleaned up!!)

  21. @ IFA

    Hmmm, perhaps I didn’t phrase it that well if that’s how you read it.

    The point was that if you go to an IFA/bank and get bad advice there’s a route to compensation. I was working on the assumption that not all advice from any source was bad. If that was the case then clearly no advice could be better. Then again, with the average person in the UK doing it themselves it could be very much worse.

    That’s the reality of sweeping statements…

  22. Roman Duzinkewycz 24th April 2013 at 12:12 pm

    Mike Hunt – says it all really.

  23. There’s bad advice, indifferent advice and good advice.

    Bad advice is a negative and nobody should countenance this.

    Indifferent advice is where a solution is provided which might not be the best. An exampe would be selling a high-charging pension or an unecessarily expensive protection plan. This is often the way of the bancassurer or tied agent, mainly because he or she has no choice in product selection.

    Good advice is unquantifiable but will likel ybe where an adviser, with choice, will select the most appropriate product and most appropriate provider for that product.

    So indifferent advice, which banks have ften given is not bad. In fact it often provides a gateway to that consumer taking un restricted advice and having the job done properly.

    How many retirees, looking back, now wish that they had taken out that seemingly expensive personal pension rather than being deflected by consumer lobbyist comments and doing sod all?

    How many widows complain about their comparatively expensive life assurance when they receive a cheque for £100,000?

    Let’s get some perspective. We don’t live in an ideal world but anybody who believes that the RDR has made things better had best visist the optician.

  24. Is all bank advice bad – No
    Is all IFA advice good – No

    Is putting money under the bed better than spending it all down the pub – yes

    Is a bad pension better than putting money under the bed – yes

    Is advice to buy a bad pension better than no advice and no pension – yes

    Is good advice to buy a good pension better – yes

    It is therefore no shock to anyone who’s been in this industry for any length of time that the most successful business models and lowest savings gaps co-inside. The fascination with price is an RDR thing the customer in the main doesn’t care – funny how so many are fascinated with the price of Hargreaves Lansdown as an example – they/their customers in the main couldn’t care less !

    There you have it – RDR a one way ticket to the biggest savings gap in history, an industry in mortal decline and an ever increasing reliance on the state by all those who fall through the gaps !.

    Its all going swimmingly !

  25. @Barney Cumpot

    Very well put. The arguement over no advice being better than bad advice is, as with most arguements, dependent upon your definition of bad and better.

    I think that “no advice is better than bad advice” probably only applys to investments when you can genuinly walk away with less money. In my opinion it can’t apply to pensions and protection where some level of advice even if bad is 99% of the time better than none at all or doing nothing.

    I’m sure someone will be able to pick holes in my logic.

    @Michael Hunt (your parents clearly had a lot of forethought)
    Are the kind of person who thinks companies shouldn’t make a profit at the expense of their customers? Do you disagree with anyone getting paid for their time or IFA’s?

  26. Re Dick Sprinkler, well put

  27. HSBC stem of corrupt self centred line management.

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