When I returned dutifully to my desk on January 2, it made me think about all the industry changes since 1999.
Life insurance companies have seen sales-forces shrink, banks are starting to become formidable sales networks and IFAs seem to be concentrating on higher-net-worth clients.
As the HNW market is slim, other IFA firms are shifting towards a more service-oriented attitude, with longevity of medium-net-worth clients being the name of the game.
The regulation of mortgages and general insurance was successful in removing many fly-by-night brokers and the cost of professional indemnity cover became sky high, causing many sole traders to consider their options. Many of the big life insurers have been bought out or have had to evolve as a result of fines and complaints during the pension and endowment reviews.
Is the small independent firm now a thing of the past? A spate of takeovers during the last few years means that many of the firms offering advice are now in the hands of the big players. Multi-tied firms have been accepted as offering first-class advice.
IFAs are in competition with the banks and together will form the main distribution arms of the industry, with pension and investment business continuing to be the most sought after business. Assets under management and fee charging appear to be the key to success.
The public views a good IFA as important to their own financial security and financial advice is finally starting to be regarded as a profession, alongside accountants and solicitors. But where are the good IFAs? There is a definite skill shortage and, with the new exam structure in place, the next five years will be extremely interesting.
Last year, I predicted that after the financial year-end, we would see a rise in job hunters within the industry once bonuses had been received. This was true to a certain level but not to the extent that employers were hoping. Too many advisers are happy with their current situation. I would like to see it made easier for people to train as IFAs so that firms can seriously consider this as an option to help address any shortage.
Within financial services recruitment, many consultants have moved into more “straightforward” markets such as IT or banking. It is not easy sourcing good IFAs and paraplanners. To attract good people, we need to be seen as dealing with the best firms and need to advertise attractive roles. On the flip side, a lot of firms deal with you once they know you have good people registered. So which comes first – the job or the candidate? The best recruiters are the individuals that have been in the industry a long time, have seen the changes and have built up a good network of contacts. The quality of that recruitment consultant will be reflected by the jobs advertised and, like IFAs, have longevity of service with clients and candidates. We also need to be compliant – meeting clients and candidates and offering a totally honest service.2007 will be an exciting year. The mortgage industry in particular is extremely buoyant, even though the property market is reported to be slowing down. People are astute and want good financial advice. As a result of this, recruitment consultants are going to be kept busy servicing the needs of this changing industry.
Karen Halliday is director of Insight Financial Services Recruitment.