With so many firms struggling to hire talented advisers, should the place where candidates have trained determine the kind of advice they give?
The number of pathways into the advice profession has increased significantly over the past decade in a bid to encourage new talent.
Coupled with the rise of vertical integration and increased competition for fresh consumer demand since the RDR and pension freedoms, the door has opened even wider to new avenues for methods of training and study.
The majority of the large advice networks now run training schools or academies which are mostly, but not always, pathways that will tie the graduate in to a career with the same advice group that provided their education.
Advice giant St James’s Place has the largest academy in the market with the majority of its now 4,000 advisers training on its specific model. Previously independent organisation The Financial Adviser School, which was acquired by Quilter and now runs under its umbrella, recently launched a funded training programme which locks advisers into a two-year role at its network, Intrinsic.
Previously, candidates entered an open programme where they could seek employment anywhere after graduating. The majority of its advisers remain on this arrangement.
Support service providers also have a foot in the door, including SimplyBiz, which owns the New Model Business Academy.
Former NMBA managing director Tom Hegarty recently moved across to Prudential’s financial planning arm, which also has a training academy for advisers, under which they can become Pru advisers.
LEBC Group launched an academy in 2017, Sandringham announced it would launch an academy programme last year, while networks and nationals like Openwork and Chase de Vere also have training schemes.
With all advisers subject to the same statement of professional standing requirements under the main six accredited qualifications bodies, networks and recruitment experts say that advice quality or bias towards particular models due to training backgrounds will be less of an issue than it may have been pre-RDR.
BWD Search and Selection marketing and communications manager Bret Jackson says smaller IFAs may want to train someone in-house but are limited with time and resources.
When recruiting, firms will always lean toward graduates who have more practical experience, he adds.
“The main issues with the academies is that they are very generic and only there to get people through the exams; they are not specific to the business or to a range of companies and the general feeling is that it is experience more than anything [that matters].
“If you’ve started up and qualified in administration, then paraplanning and up to advice, working within an IFA practice, no matter how small, is far better from a recruitment perspective than a qualification from a network.”
Jackson says some bias exists, but is likely to be dependent on the specific firm doing the training or looking to hire.
While SJP is frequently criticised for its advice processes, for example, its academy model is viewed as highly prestigious beyond its doors.
Jackson says: “Their model works and they have had their academy and their way of progressing for years.
“Because the advisory market has had years of decline and stagnated and we haven’t seen an uptake in people coming into the sector, the academies can be a good idea and concept because they get new blood flowing into the system.”
Personal Finance Society chief executive Keith Richards agrees, saying all advisers can be held to the same basic standards regardless of how they were trained.
He says: “The principals of professional advice are generic, irrespective of firm specific processes or their restricted or independent status.
“There is both a need and an appetite for succession and the attraction of new talent to meet increasing consumer demand for advice, so the more routes the better.”
Quilter Financial Adviser School head Darren Smith says the academy programmes that tie graduates in to a firm could actually stop the wider profession filling gaps though.
He says: “More trainees are needed to stop the industry from shrinking. It is only through an open approach that the industry will have a positive impact on reducing the advice gap and ensuring the prosperity of the generations of today and tomorrow.”
London Institute of Banking and Finance senior relationship director Rob Thompson says courses are “exactly the same” regardless of whether they are taken direct through a school like LIBF or administered through a network-run academy.
Richards says any bias is overshadowed by the need for more doors into the industry.
“I am delighted that networks, support services and advice firms are playing a role in doing something about closing the talent gap and increasing capacity across the sector, rather than talking about the problem,” he adds. “All schemes are created to attract, train and qualify new talent and that should be applauded.”
Jackson says that while some networks run successful academies, placement within them is not likely to be an advantage if the recruit looks to join an IFA firm after training.
“The general consensus across the board for IFAs or small wealth managers looking to attract talent is that if an adviser who is a prospective employee has attended an academy at a network, it doesn’t put them in any better stead for a position than if they had not,” he says.