UK insurer Axa has revealed plans to cut 450 bank-based roles in the latest blow to the country’s jobs market. Branches of the Co-operative, Clydesdale and Yorkshire banks will be affected by the move, which Axa claims is a logical step in the cessation of face to face financial consulting.
The group has blamed a shake-up in the financial advice sector for the decision. Thanks to the recent payment protection insurance (PPI) scandal, the Government has tightened regulation in the banking industry and as such Axa is no longer allowed to provide free financial advice in case such tactics were used to sell unsuitable products to customers.
Axa chief executive, Paul Evans, highlighted that the group is only the latest in the UK to cease to provide face to face financial consultation.
He said; “Following similar announcements by major retail banks, we are very disappointed that Axa UK must also now withdraw this service having not found a model which balanced the regulatory requirement that the service be profitable in its own right, whilst setting advice fees at an affordable level.”
Certainly, the Royal Bank of Scotland has announced the loss of 600 financial planning jobs, while Lloyds Banking Group will be gradually cutting up to 1,000 roles. With the employment situation slowly but surely turning around, this will be a frustrating step backwards for the service sector.
As well as a significant hit to the workforce, Axa’s decision will affect the way the business is run. From now on, advisers will be based solely in call centres – a huge change from the bank concessionary desks operated for the past nine years.
A spokesperson for the insurance group confirmed that all staff likely to be affected have been informed by management, while Yorkshire and Clydesdale banks wished to assure customers that the quality of service they receive in their local branch will not be compromised.
According to a spokeswoman for the chain; “This decision does not impact on any of the advice our customers have received or on any policies they hold.
“We will continue to focus our support for Clydesdale and Yorkshire bank customers across our core retail and business banking strengths.”
Meanwhile, the Co-operative has already begun to research alternatives to the in-branch Axa service. It remains to be seen whether the Government’s initiative will prove to be a success for consumers seeking sound financial advice, or whether by removing free advice it has simply caused more problems for both customers and employees of Axa Insurance Group.
Do you think free financial advice should still be available and consumers seeking help should be allowed to use their own judgement in selecting which products to take up?
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