Royal Bank of Scotland is to slash over 600 UK jobs in reaction to incoming rules on the sale of investment products to customers. The cuts have been described as "brutal" by union leaders and competing banks that have opted to invest in a branch-based sales force.
The RBS cull is in response to the forthcoming introduction of the Retail Distribution Review, which strips out commission payments to financial advisors in favour of a simpler charging structure with transparent fees.
The bank says that the net effect of the cuts will be closer to 250 roles lost as it intends to recruit for 351 new positions.
RBS is not alone in restructuring its retail operations in advance of the new rules. HSBC in April announced plans to cut 2217 staff across its UK operations in an effort to maintain profitability.
The Unite union has condemned RBS, blaming external economic factors and the imposition of unrealistic sales goals as the driving force behind the cuts.
David Fleming Unite national officer, says: "The union has continually raised with the bank the increasingly unachievable targets imposed on the workforce and is calling on it to review this redundancy procedure. Those losing their jobs today are a highly skilled workforce, and the bank has refused to take into account economic factors which have impacted performance and achievability of targets."
Rival high street outlet Nationwide, also rounded on the bank. Jason Hurwood, director of Nationwide Financial Solutions, says: "While other financial institutions are making brutal cuts, we are doing the exact opposite in the run up to RDR and boosting the number of trained advisers to help ensure customers are fully supported. Nationwide is firmly focused on becoming the most trusted brand for financial advice on the high street, and our advisers are crucial in achieving this as they maintain the lasting and rewarding relationships with our customers."
Nationwide's approach is in line with the school of thought that holds the branch network as a valuable asset for offering face-to-face financial advice and up-selling new products.
Upstart outfit Metro Bank has also announced plans for a big expansion of its retail branch network on the back of a recent £126 million funding round. The banks says that it has received over 40,000 applications for the 475 roles it has created in its 13 stores since its July 2010 launch. This number is set to increase as Metro Bank aims to recruit up to an extra 250 positions this year, and to grow to 200 stores by 2020.
Craig Donaldson, Metro chief executive, says: "Metro Bank is recruiting to grow as other banks are cutting costs and shutting down branches. In our customer facing roles, we recruit for attitude and style just as much as we do for banking experience - so we're looking for staff who love interacting with people, providing fantastic service and never saying 'I can't do that'.