News last week of the latest job move for a prominent Scottish financial services figure provided a reminder of the scale of the changes that have affected a key sector, and which have worrying implications for Scotland.

Adrian Grace has been appointed chairman of the 7IM investment management business after holding senior positions with Scottish players ranging from the former HBOS to Aegon UK.

READ MORE: Scottish financial services heavyhitter appointed chairman of prominent investment management firm

7IM acquired a significant presence in Scotland in 2018 through the purchase of the TCAM asset management business that was spun out of law firm Turcan Connell.

It said it was keen to hire Mr Grace because of his track record of bringing together and integrating technology and financial service solutions.

Mr Grace burnished his credentials while running Dutch-owned Aegon UK for 10 years before retiring from the job in January.

The business developed out of the Scottish Equitable life and pensions operation that Aegon bought in 1994.

However, Mr Grace shifted its focus in recent years to the provision of online platforms that people could use to help manage their investments. In an age in which many people are having to take increased responsibility for saving for retirement, he decided this offered better growth prospects than the sale of pensions.

READ MORE: Aegon UK in £140m deal to create platform market leader

The decision sent an ominous signal about the prospects for the life and pensions industry, which has long been a mainstay of Scotland’s financial services industry and has provided careers for thousands.

Significantly, Mr Grace also struck a deal to out-source the administration of Aegon UK’s pension book to Atos in 2018 under efforts to cuts costs and highlighted the potential offered by automation.

Moves made by other firms that became big on the back of the sale of pensions and life cover are likely to increase the pressure on jobs across the sector.

The Standard Life Aberdeen business created following the £11 billion merger of pensions heavyweight Standard Life and Aberdeen Asset Management (AAM) in 2017 decided to focus on the global investment management market.The enlarged group sold its Standard Life Assurance pensions business to Phoenix, which had focused on running closed pensions books.

READ MORE: Standard Life Aberdeen wins investor backing for transformational £3.2bn sale of pensions arm 

In November Phoenix announced a tie up with TCS, the Indian outsourcing specialist. This will involve using digital technology to boost profitability. It is expected hundreds of jobs will be lost in Edinburgh over time as a result.

Recently Scottish Widows owner Lloyds Banking Group announced plans for 865 job cuts which are expected to impact on the venerable Edinburgh-based pensions operation. Lloyds said the cuts related to existing plans to simplify the group’s businesses which were put on hold amid the coronavirus crisis.

The group formed a new wealth management operation with investment giant Schroders after the merger between Standard Life and AAM. It decided to move £80bn of funds managed by AAM on behalf of Scottish Widows to other firms.

The pressures on wealth and investment management firms were evident last week when it emerged Rathbones was hiking the fees payable by former clients of Glasgow stockbroker Speirs & Jeffrey, which it bought for an initial £104m in 2018. Speirs & Jeffrey felt it had become too big to operate as a boutique but too small to grow fast enough as an independent.

READ MORE: Former clients of Glasgow stockbroker face hike in fees under its new owner

Explaining the fee increase, Rathbones said the costs of providing a modern investment management service had increased relentlessly in recent years.Factors it cited included the need for ever-increasing IT investment. Rathbones shed 58 jobs in Glasgow in February.

The consolidation process and increased use of technology in the investment sector will likely lead to more jobs losses in Scotland and not just those of people working in back office functions. Some UK firms are already offering the services of Robo advisors.

Scotland may be able to capitalise on its strengths in technology and financial services to support the development of plenty of financial technology companies.The big question is can the fintech sector create enough jobs to replace those that are lost in traditional financial services?

It is notable that Mr Grace also served as a non-executive director of Clydesdale Bank for five years, during which it axed branches across Scotland.