HSBC Swings The Axe At UK Wealth In An AI Push

HSBC is preparing deep job cuts across its UK wealth management arm. It plans to cut about half of its management and specialist roles and close to 70 per cent of its financial advisers, as it leans on artificial intelligence to serve wealthy clients.

What Is Happening

The Financial Times reported that the cuts will run right across the UK wealth business, citing people familiar with the plans. One source described them as "deep, wide and brutal", with almost entire teams made redundant. HSBC does not publish headcount for the division, but it is thought to employ hundreds of relationship managers across the country.

The bank is in a consultation period, and affected staff are expected to leave at the end of October. In a statement, HSBC said it is continuing to evolve to deliver "more digitally enabled products and journeys".

A Sharp U-Turn

Having spent three decades watching banks swing between expansion and retrenchment, I find the timing striking. Two years ago, HSBC went on a hiring spree to build its UK wealth and private banking operations, with a target of doubling assets under management to £100bn by the end of the decade. It held just over £62bn at the end of last year.

Now the same division is being cut hard. The change of direction follows the departure of José Carvalho, head of wealth and personal banking in the UK, who announced he was stepping down in a LinkedIn post last month after three years.

The AI Playbook

Chief executive Georges Elhedery has made AI central to his plan to simplify the bank since taking over in September 2024. He has also pledged to cut headcount by stripping out layers of management and removing duplicate senior roles. In a report this summer, titled "Our strategy, built on trust, accelerated with AI", he singled out wealth management as one of the areas where AI could have the most impact.

His line is that AI empowers relationship managers to serve customers faster while personalising the experience. It is a neat message. The numbers now being reported suggest the reality is rather more dramatic.

Where Human Advice Fits

Digital tools may well suit straightforward needs, but it raises a question the industry has yet to answer. If you remove most of the advisers, who builds the relationships that bring complex clients in the first place?

Wealth management has always rested on trust. Clients tend to stay with an adviser they know, often for years, and they talk to that person at the moments that matter, such as retirement, inheritance and divorce. An algorithm can surface market insights quickly, but it cannot sit across a table from someone who is worried.

Productivity or Smaller Workforces?

The cuts land in the middle of a wider debate. One camp argues that AI will boost the productivity of existing staff. The other believes it will let companies run with far smaller workforces. HSBC's move suggests which way at least one major bank is leaning.

For advisers across the City and beyond, the message is uncomfortable. Routine tasks such as research, reporting and basic portfolio suggestions are increasingly handled by software, so the value of a human adviser has to sit elsewhere. That means judgement, empathy and the ability to explain a difficult decision in plain English.

What It Means for Clients

For clients, the picture is mixed. Digital tools can mean faster responses and more tailored information, and for straightforward needs that may be a real improvement. Premium customers, however, usually pay for access to people, and some will question what they are getting if the personal touch thins out.

HSBC will be watching carefully for any drift of clients to rivals that still promote dedicated human advisers. Competitors will almost certainly use this moment to market exactly that, and some of the displaced advisers may well end up there.