HSBC hired hundreds of wealth managers in the UK. Now it may fire 70% of them
Forget Jane Fraser and her aspiration to cut 20,000 jobs at Citi, HSBC CEO Georges Elhedery is developing a strong reputation for being particularly willing to make hard decisions.
The Financial Times reported today that HSBC is planning "sweeping" cuts to its UK wealth business, which will result in 70% of its UK financial advisers being let go at the end of the month, following a mandatory consultation period.
A spokesperson for HSBC declared: “HSBC UK is a long-established, leading UK wealth manager and premium banking provider. We’re continuing to evolve to deliver more digitally-enabled products and journeys, to support our best-in-class wealth service and meet the changing needs of our customers.”
The cuts appear to have the blessing of Elhedery, who said this summer that HSBC is "empowering" its relationship managers with AI and reinvesting productivity gains. The AI empowerment is via a tool that "delivers real-time market insights and personalised investment strategies," said Elhedery.
In a possible leading indicator that something was afoot, Jose Carvalho, who arrived to run the UK wealth business in 2023, stepped down three weeks ago. Carvalho is now "rebalancing life and work" and the task of cutting 70% of the advisors will seemingly go to interim head Colin O'Flaherty, who wrote earlier this week that he feels "hugely privileged to lead the team."
HSBC insiders have been pointing out that it wasn't so long ago that HSBC was hiring hundreds of people in wealth management. In 2021, Nuno Matos, the former CEO of wealth and personal banking at HSBC, conceived a plan to add 5,000 "client-facing wealth planners" in Asia over a three to five year period. Matos left the bank last year and is now chief executive of ANZ. But Carvalho was overseeing an offshoot of Matos' plan in the UK and was said to be preparing to hire "hundreds" of wealth managers across the country in 2025.
Many of those wealth managers were added around the country in places like Peterborough, Truro and Telford, where HSBC has offices. They were often relatively junior and moved into wealth management after starting their careers as cashiers or in mortgage advice.
It's not clear what they will do instead.
HSBC staff may be justified in feeling some trepidation about what will occur next. One insider told the FT the cuts are "brutal." Elhedery himself declared last year that he was prepared to be ruthless and to make difficult decisions.
Elhedery already closed HSBC's investment bank (ex debt capital markets) outside of Asia and the Middle East. In March, Bloomberg reported that HSBC was planning to use AI to replace 20,000 jobs in the next three to five years. CFO Manveen Kaur suggested jobs requiring "very basic binary decision making" were being automated, but said that at Hang Seng bank in Asia at least, HSBC would be "upskilling" its people rather than cutting jobs. In the UK, this doesn't appear to be so.
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