Attracting the next generation of advisers is more critical now than ever, as Simoney Kyriakou reports
The UK economy slumped more than 20% in the second quarter of 2020 according to the Office for National Statistics, while job losses in the UK are escalating. In such an environment, and under the shadow of fresh waves of Covid-19 and Brexit deal disruption, hiring new staff might seem counterintuitive.
However, for those businesses continuing to hire throughout 2020, this has been imperative. And it is not just the large firms with well-resourced academies: local firms are also hunting for the next generation of financial advisers. For example, Telford Mann Pensions & Investments is targeting college leavers to offer training through to Chartered status.
According to Jilly Mann, joint managing director of the Kettering-based firm, it has already hired five trainee paraplanners and advisers this year and wants to “recruit locally and provide opportunities to bright candidates who have perhaps had their career plans thrown into disarray by the coronavirus”.
The firm invests an average of £10,000 in every trainee who progresses to Chartered status and this sort of outlay is vital if the financial advice industry is to thrive and serve successive generations of clients.
Jobs forum CV Library says applications for finance jobs soared in June this year – by 49.5% compared to May. The fields are ripe for harvest.
Martin Stewart, founder of London Money, says firms should take note: “Given where the economy is right now, there will be well-educated people with many contacts who may be considering a career change.
“Any business with a recruitment and training programme in place would be wise to ramp up its marketing to people from outside the industry.”
Ever since the retail distribution review (RDR) was announced in 2008, successive layers of regulation have exacerbated an advice gap. When RDR came in, banks shut their advice doors and many older, experienced advisers left the profession. Alongside greater professionalism came higher fees and a focus on clients with larger portfolios.
In addition, the rushed-through pensions freedom regime in 2015 and the subsequent defined benefit transfer fiasco creating a perfect storm where regulatory levy increases and professional indemnity insurance premium
hikes have pushed many advisers to the brink of selling, retiring or leaving the profession altogether.
Even the 2016 Financial Advice Market Review (FAMR) acknowledged the growing advice gap. According to the 85-page report, there had been approximately 40,000 advisers, including bank advice staff, in 2011. By 2014, this had fallen to little more than 30,000. The report suggested ways to close the gap, including focusing on technology to provide lower-cost means of reaching less-affluent clients.
However, even these methods necessitate hiring the right candidates with the right knowhow and technological skills. As Covid-19 has demonstrated, we need to be able to work well, remotely.
Ian McKenna, founder of the Financial Technology Research Centre, comments: “The most effective workers will be those who can work best with technology and use it to improve overall productivity.
“Consequently, recruitment should focus even more on understanding the extent of an individual’s computer skills.”
For advice firms considering how to go about training newcomers, the input necessary to nurture beginners through to Chartered status might seem daunting in terms of time and resources.
However, the end result is worth it. Leigh Tarleton, director at Beaufort St Helens, says the impact of having hired two graduates two years ago has “been profound”, adding: “The long-term value they have brought to our team is apparent now more than ever.”
The government has recognised, recession or no recession, that business owners must still recruit and retain the very best ‘next generation’ staff.
In July this year, Chancellor Rishi Sunak announced the Plan for Jobs scheme, which included Kickstart – a means of providing apprenticeships for young adults. Kickstart sits alongside a guaranteed foundation of support, delivered through the Department for Work and Pensions.
As the Chancellor put it, this is part of a “large-scale, ambitious plan” to help young people improve their chances of going on to find long-term, sustainable work.
Many companies are taking advantage of government-backed apprenticeships schemes or have created their own, such as the New Model Business Academy’s programme, or the CII’s Aspire apprenticeships scheme.
The Aspire apprenticeship programme aims to deliver structured training, delivered by reputable providers, to help develop specific skills. It gives both the apprentice and the firm a “helping hand” throughout and aims to be cost-effective, while being thorough. So far, more than 300 firms have registered for the programme.
Recession or no recession, firms need to focus on the future, which means finding fresh talent is business-critical.
Simoney Kyriakou is the editor of Financial Adviser