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HSBC restructures advice arm; 1,149 jobs at risk

HSBC restructures advice arm; 1,149 jobs at risk

HSBC is to restructure its advice arm putting 1,149 jobs at risk.

The restructure will affect 3,166 employees but the bank will create 2,017 new roles.

As part of the restructure the bank will merge its advisers into its consumer retail banking business and create a diploma qualified advice force of 853 people.

The bank will scrap its commercial financial adviser division and cut 942 relationship managers who do not give advice.

The bank said the changes mean that HSBC UK Premier customers who already hold £50,000 of savings and investments with the bank will have a relationship manager qualified to give financial advice as a single contact for both their banking and financial advice needs.

The bank said the restructured advice service would operate with the same charging structure as before.  

Brian Robertson, chief executive of HSBC Bank, said: ‘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’m confident a significant majority will remain with the bank.’

Antonio Simoes, head of UK Bank and deputy chief executive of HSBC Bank, said the changes were part of a step away from a sales-based approach and aimed at improving its culture to serve customers.

‘Better serving our customers, particularly for their wealth management needs, is essential if we are to fulfil our aspiration of becoming the world's leading international bank.

‘These proposals, together with the recent removal of all sales targets for our employees and the complete decoupling of incentives from those sales, mean our customers can expect us to fully focus on serving their needs and do the right thing. Evolving and improving our culture will take time but the changes announced today are another step in the right direction.’

The bank also announced it would reduce the number of business specialist roles in its commercial banking business and increase the number of international business managers in the UK.

The cuts follow AXA UK’s decision to pull out of retail banking advice by ending its partnerships with the Co-operative Banking Group and Clydesdale and Yorkshire Banks last week, leading to 450 job losses.

In April 2012 HSBC scrapped its tied advice service and cut 650 advisers as part of the 2,217 job losses made at the bank. At the time it said it would keep its 400-strong whole of market IFA arm for high-net-worth clients.

In January the advice arm became restricted as a result of the requirements of the retail distribution review (RDR) but the bank said the change was in definition only and no changes were made to the advice proposition.

Earlier this week Douglas Flint, chairman of HSBC, said mass market clients could lose access to advice if banks become burdened by regulation.

According to the Daily Telegraph, Flint said the industry was moving towards serving high-net-worth clients and it had become harder to sell simple products to lower-net-worth clients.

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