The Royal Bank of Scotland is preparing to shed 550 jobs as part of a plan to replace staff who offer investment tips with so-called ‘robo-advisers’.
RBS, which is 73 per cent owned by taxpayers, is shrinking its investment advice team by making the service available only to people with more than £250,000 to invest. This is down from £100,000 currently.
The bank is cutting the jobs of 220 face-to-face advisers, as it switches customers to the automated online service. It is also cutting a further 200 jobs in insurance products.
Robo-advice tells customers where they should invest based on a series of online questionnaires about their financial situation.
After a seven-month study, the Financial Conduct Authority (FCA’s) Financial Advice Market Review concluded that the new technology could “play a major role in driving down costs”.
The FCA said that many consumers did not want to pay for full regulated advice, but simply wanted more informal guidance.
It recommended several ways in which employers could be encouraged to give such guidance, with consumers able to pay for it over a period of time.
“The package of reforms we have laid out today will help increase both the accessibility and affordability of the advice and guidance, to ensure that consumers get the help they really need when they really need it,” said Tracey McDermott, the FCA’s acting chief executive.
At least three more High Street banks are thought to be planning to launch such services.
“We want to help as many customers as possible invest their money in the right way for them,” a spokesperson for RBS said.
“The demand for face to face investment advice is changing. Our customers increasingly want to bank with us using digital technology. As a result, we are scaling back our face-to-face advisers and significantly investing in an online investing platform that enables us to help a new group of customers with as little as £500 to invest.”
Banks scaled down their financial advice services in 2013, when a review by the previous regulator made it impractical for them to provide cost-effective help to most consumers.