First it was Barclays who, earlier in the year, shed up to 1000 jobs from its financial planning department, arguing that customers were buying more products online than in branches.
Then nearly three weeks ago it was HSBC and Lloyds Banking Group who, on the same day, announced a cull of 700 and a jaw-dropping 15000 jobs respectively.
Now, Co-operative Financial Services (CFS) has joined the pack as the latest bank to axe hundreds of field-based financial advisers from its books, leaving as many as 670 unemployed.
The decision was announced on Friday (July 15), after a 20 month review, and comes just as CFS are set to plough £700m into its banking operations.
The job losses are part of the company's review of its life and savings business, which was set up to consider the impact of new rules on financial advice in the UK.
The decision is thought to affect a total of 752 CFS employees. All 497 of the sales staff and the remaining 173 office-based managerial and support roles will lose their jobs.
However, despite its exit from offering financial advice directly, CFS has signed a seven year distribution partnership with French insurer Axa, which will provide in-branch financial advice to the Co-op's five million retail banking customers. As a result, 82 existing Co-operative branch-based advisory roles will be transferred to Axa.
CFS Chief Executive, Neville Richardson, said that although the Retail Distributive Review (RDR) will raise regulatory costs in a business which was increasingly sub-scale, the move supports their strategy to focus on banking and general insurance.
David Fleming, national officer of Britain's biggest union Unite, said: "The 750 employees potentially affected by this news will be deeply concerned and upset.
“Unite has already made clear that the decision to cease to be a provider of life assurance products is a very sad and monumental moment in the history of CFS and the whole of the co-operative movement.”
But what will it mean for the consumer? Well, the reality is that the new law in RDR means banks can no longer offer financial advice to clients for free.
HSBC have previously stated that their cuts are in response to a dropping demand for financial advice, due to the upcoming changes in the law.
However, let’s not forget that, only last month, the Chartered Insurance Institute (CII) estimated 11 million additional people would seek financial advice if the aims of the RDR (Retail Distribution Review) were properly explained to them.
However, with many of the major UK banks coming under increased pressure from growth, stock markets and interest rates, it’s fairly clear that they simply cannot afford to put their financial advisers through the relevant exams and gain the necessary qualifications required by 2013.
With free financial advice soon to be no longer available in banks, clients will instead have to seek Independent Financial Advisers that are fully qualified.
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