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Lean 2013: a year of cutbacks for financial services
by Alex Steger on Oct 17, 2013 at 14:49
L&G became the latest large financial services company to announce potential job cuts when it unveiled plans to make around 600 redundancies following a restructure. We take a look back at some of the biggest cuts of the year so far...
In February this year Barclays saw its share price soar after it said it was going to cut at least 3,700 jobs.
Some 1,800 posts were set to go in the bank's corporate and investment bank division and 1,900 from its Europe retail and business banking arm.
The announcement followed the appointment of chief executive Antony Jenkins who upon outlining his vision for dramatic streamlining said he wanted to find a way for the bank to operate with as few as 100,000 staff, or around 40,000 less than it operates with now.
In September, Barclays announced that it planned to cut its private banking headcount, as part of an overhaul of the way sub-£500,000 clients are serviced.
Yorkshire and Clydesdale
Yorkshire and Clydesdale banks announced cuts to 130 jobs in March, and said they would stop providing financial advice through their business and private banking arms.
The cuts by Yorkshire and Clydesdale were part of a planned reuction of 1,400 jobs announced in April last year.
After a fair bit of deliberating Santander finally pulled the plug on its face-to-face investment advice service, cutting 724 jobs in March.
Santander said in a statement: ‘There is never a good time to announce changes such as this and we are acutely aware of the uncertainty staff are facing.
In December 2012 Santander suspended its investment advisers in order to train them up to be ready for the retail distribution review.
In February New Model Adviser® revealed Santander was being investigated by the Financial Services Authority (FSA) following a mystery shopper exercise into its advice.
Where Santander led, AXA followed with the insurer also pulling of out of face-to-face retail banking advice by ending its partnerships with the Co-operative Banking Group and Clydesdale and Yorkshire Banks.
The decision followed a strategic review into face-to-face financial advice models for the needs of bank customers and requirements of the new regulatory environment.
AXA said the move would result in the loss of approximately 450 jobs.
AXA and Santander’s cuts were nothing compared to the scale of the reductions at HSBC which set out plans to restructure its advice arm putting 1,149 jobs at risk.
As part of the restructure the bank said it would merge its advisers into its consumer retail banking business and create a diploma-qualified advice force of 853 people.
The restructure will affect 3,166 employees but the bank said it would create 2,017 new roles.
In April Aviva unveiled plans to cut 2,000 jobs across the group in the UK, Europe and Asia as part of a cost cutting drive.
The job reductions were part of a programme to reduce expenses across the whole business, including ‘substantial non-people related savings’, it said.
Chief executive Mark Wilson said: ‘I know this is difficult news for our employees but these changes are essential if we are to remain competitive.’
In July 2012 the provider announced plans to cut costs by £400 million by the end of 2013 and in November 2012 to cut 120 UK jobs.
In 2011 Lloyds Banking Group set out plans to shed 15,000 jobs by the end of 2014 and it delivered 850 of these in May this year, taking the axe to commercial and retail banking, group operations, insurance, finance and wealth management divisions.
Lloyds said it was committed to working through the changes with employees in a careful and sensitive way.
In June Aegon said it planned to close its six regional sales centres, cutting around 160 roles.
The move followed a review of the company’s distribution structure.
Aegon said it would increase the number of staff working on its Aegon Retirement Choices platform and was looking to increase platform implementation roles from 19 to 42.
The company said in total 43 new sales roles would be created with a focus on the platform.
In June it was announce that Royal Bank of Scotland (RBS) chief executive Stephen Hester was to step down. The cuts did not stop there and a day later RBS said it was to axe 2,000 jobs from its investment bank division, which would reduce headcount by around 20%.
Like Personal Touch, Lighthouse has had to tighten its belt in 2013 and is looking to close down its Exeter office which could put around 40 jobs at risk.
The national advice group, headed by chief executive Malcolm Streatfield (pictured), announced it had undertaken a strategic review and concluded it may close the Exeter office and make operational changes.
The proposal, which is subject to final board approval, recommended the work currently carried out from the group's back office operations centre in Exeter be transferred to its Stockport and Woodingdean offices before the end of March 2014.
It has not just been providers cutting their cloth this year, even traditionally sprawling network have been downsizing.
In September Personal Touch Financial Services announced that it was to cut ties with 16 firms which it no longer wants to house, under plans to shrink and revamp the network.
The 16 firms house 18 advisers between them. The decision follows news that the network lost 157 advisers over 2012 which the firm said was also down to its restructure plans.
Legal and General (L&G) is in talks with trade union Unite over cutting around 600 job cuts across its protection and savings division.
New Model Adviser® understands the cuts represent 10% of the division which currently has 6,000 employees and will impact its four offices in Birmingham, Cardiff, Hove and Kingswood.
The move follows the creation of Legal & General Assurance Society in July after the insurer merged its old life and savings and annuities and protection divisions.