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Building the perfect financial adviser

Leading the pack, ingenuity,standing out from the crowd concept.Can you go from zero to planning hero?

New recruits are not entering the advice industry at the rate required to meet the growing need for service, despite strong salaries and job satisfaction.

A joint report from recruitment consultants BWD and Money Marketing earlier this year showed average adviser earnings soared to £93,100 in 2017, driven by both bonuses and increasing base salaries.

The report also showed an all-time high demand for advice and protection, opportunities for workplace-based planning and training, and growing technology offerings that facilitate the profitable service of wider client bases.

Recruits to the industry have not always come from diverse backgrounds, because of the way financial advice as a profession historically developed. Over the past decade, with new financial planning qualifications at university level creeping in, many networks and small adviser firms have been challenged to cast the net wider when recruiting.

To meet client demand, firms have to balance the need for young entrants with that for competent, experienced staff with established skill sets. The demands for these individuals continues to grow.

Money Marketing spoke to several national firms and networks to compare how graduates from university, career-changers and trained-up paraplanners fare against each other as qualified advisers.

The broad church of advice

Data provided to Money Marketing by Quilter shows a diverse breakdown of candidates entering its Financial Advice School.

In the year to April 2018, 27 per cent of incoming students were school leavers in first or second jobs; 28 per cent were college leavers in first or second jobs; and 24 per cent were university graduates in a first or second job.

FAS head Darren Smith says: “Young graduates come to us with great enthusiasm but relatively few preconceptions about finance and the industry, which gives us a great opportunity to teach them best practice from the very beginning.”

Trainees at FAS complete a 58-week course, which Smith says is designed to make graduates industry-ready, rather than trained specifically as Old Mutual Private Client Advisers or Intrinsic advisers.

Smith says Quilter has had equal success with people who have left their first career and retrained and those already in financial services.

Ascot Lloyd head of human resources Cath McVey says the group’s academy programme had once placed a university graduate, a career changer and a paraplanner at one of its associated practices.

To meet client demand, firms have to balance the need for young entrants with that for experienced staff

After 12 months, only the career-changer was still within the programme. She says: “Across the board, there can be a serious underestimation of how much you need to learn and candidates struggle, realising it’s not just a few exams. This experience just shows that everyone needs to be trained as an individual.”

Chase de Vere head of communications Patrick Connelly says the group finds recruiting high-quality advisers a constant challenge.

He says: “If firms get it right they can have an experienced adviser who is ready to start seeing clients and producing fee income very quickly. However, if they recruit the wrong advisers, then this will cost the company in terms of time, inconvenience and money.”

 Adviser view –  Susan Hill, chartered financial planner, Susan Hill Financial Planning

The landscape has changed – previously people becoming advisers were older. We’re missing all of that great training we used to get and it was paid for, then you could just go and start up your own business.

At the moment, it’s the networks providing all that training, but then you stay with that network as an inexperienced adviser. It’s hard on young people joining and the academies are being run by vertically integrated companies, which I don’t like. Maybe we need to go back to the product providers doing it, but what I’d like to see is something like the Personal Finance Society starting up an academy.

To combat this, Prudential Financial Planning’s strategy and financial planning director Peter Coleman says programmes have to be flexible so as to fit multiple backgrounds.

He says: “Success or failure as a financial adviser is often down to the personal qualities of the individual. Those with grit, drive and determination, coupled with sincerity and integrity, have an excellent chance of thriving, regardless of their background.”

Making advice attractive

Tenet recently announced its intention to attract more advisers from providers and banks via its “business in a box” programme, by helping advisers set up their own companies.

A Tenet spokeswoman says that by attracting such advisers and allowing them greater control by being self-employed will encourage more to stay in the industry.

Business in a box will be restricted, but Tenet says there will be no bias, with 20 providers to choose from. Advisers who are currently running independent businesses will also be able to set up a separate, restricted enterprise.

McVey says Ascot Lloyd initially suffered staff departures from its academy because of its poor training plan structure. Since relaunching, she says the academy had more than 600 internal and external applications from a variety of backgrounds, including paraplanning and administration, as well as career changes and university graduates. An individual formerly working in a young offenders’ programme will also be trained.

Young, upcoming advisers will need to learn the interaction and social skills, such as how to run business meetings

She says: “Our former model relied on IFAs who didn’t always have the time. Now, coaches have to be local to trainees.”

Attracting young advisers to an industry with a high average age has continued to prove difficult.

Coleman says Prudential FP believes graduates should be encouraged and are a strong choice for the advice industry because they are used to the pressure of studying and working quickly.

He says: “Graduates are very keen and quick to adapt to new environments and they can then progress quickly to Level 4, but the disadvantage they sometimes have compared with those in a career is they are less likely to have gained the maturity of life experience you need to be credible in front of clients.”

Coleman says that topics such as family protection, investing and retirement planning need extra attention in training.

Prudential FP has also recruited for around 20 advice roles from within its staff base. Coleman says business-specific knowledge proves to be a strong advantage when academy graduates level out after training.

Changing industries

Openwork launched its in-house training academy at the end of 2014 and has between 100 and 200 new advisers a year who graduate from the programme and move directly into the Openwork group.

Director of wealth Mike Morrow says while the academy was launched predominantly to target graduates, it operates a multi-tiered stream to recruit trainees from different backgrounds and age brackets.

Openwork has a programme for university graduates; a fast-track programme for professionals from other fields; for current Openwork mortgage advisers looking to become chartered; and a stream for its paraplanners who want to move into advice. Each is tailored to what the group needs to learn.

Morrow says: “Young, upcoming advisers will need to learn the interaction and social skills, such as how to run business meetings and how to make presentations to clients.

“Our paraplanners and mortgage advisers will already know that, and so will recruits from other professional work environments.”

While most firms say a majority of career changers come from accountancy, business and engineering, Morrow says that looking further afield has led to positive results. As well as focusing on ex-services personnel, Openwork also works specifically with retiring athletes.

The FAS is also building on this idea. Smith says this developed from research commissioned by Quilter last year showing less than half of retiring athletes receive information on their post-competition options.

He says: “Professional sport is a career with a relatively short shelf life. We want to get in front of this group and present them with the information they need to make an informed decision about whether becoming a financial adviser is right for them.”

FAS also works closely with the armed forces and ex-services personnel, who can complement existing skills with technical knowledge.

He says: “We’ve had great success, because these sectors provide excellent skills training, such as attention to detail, leadership and people skills. As a starting point, there is a natural ability for building trust with clients.”

While they also require guidance on technical support, McVey says career-changers find it easy to go out into the market and build relationships. She says: “Second jobbers are very driven and often very self-directed and certain because they’ve taken the steps to actively seek out and enter the profession.”

Coleman adds: “Recruiting people who have had a previous career to become financial advisers makes good sense, because they are often very determined and deliberate about their second career.”

Who makes the best adviser?

While paraplanners will always possess the best technical knowledge, McVey says those who have always chosen not to work in a client-facing environment struggle to make the changeover.

She says: “A majority of the paraplanners we see find it very difficult to transition and find the idea of meeting clients terrifying.

“They also find it difficult to build networks and to be self-sufficient because they are so used to being directed. They need to spend more time shadowing and really need to be coached.”

McVey says that to address this issue Ascot Lloyd is flexible with its trainees on the length of the programme. Standard academy entrants spend 18 months in training before shadowing advisers in the workforce for up to a year, but some are in the programme for up to three years.

Candidates to the LEBC academy receive training on technical knowledge, compliance, planning, pensions, investments and protection. Trainees come from school or university and are expected to pass exams to become an adviser within two years.

LEBC’s Foundation managing director Jeremy MacLeod says its focus will remain on graduates. He says: “We wanted a professional training programme in the form of a dedicated academy to attract young talent and train them accordingly, because the financial adviser demographic is older than most other industries and there are a limited number of young people coming through the ranks.”

Tenet subsidiary Progeny Wealth will also look to start an academy-style programme that takes school leavers through administration and paraplanning to advice. Managing director Neil Moles tells Money Marketing that three trainees have started with the firm, with up to five more expected later in the summer.

Trainees will take a specifically designed route through from the administration levels to a more complex role that involves client-facing work, where most will spend another two years.

Moles says: “There’s no overnight solution. It’s all about time with this. While they are in the administrative position for a few years, they will shadow advisers and work on their presentation skills that you just can’t read about in a book.”

Connelly says Chase de Vere takes the longer route of training advisers in-house from graduate level or from other industries, rather than employing and providing firm-specific training to existing advisers.

He says: “Many experienced advisers don’t settle well into a new company. This could be because they don’t fit with the new culture or working practices, or just don’t have the required qualities to succeed with the new business.”

St James’s Place, which has the largest adviser training academy in the market, did not respond to Money Marketing by the deadline.

New academies in the pipeline

Under its new independent banner, network Sandringham Financial Partners is one of the largest groups that is launching an academy. Chief executive Tim Sargisson told Money Marketing in April that it would focus on attracting graduates and be operational by 2022.

While details are ironed out ahead of graduates joining the firm, Sandringham’s advisers are testing the offerings.

FCA probes adviser training and competence in letter to firms

Sargisson says: “Our own staff are going through it. They are taking their exams through it, and we hosting a lot of the support work on there, including our marketing training module that our advisers now have to go through because of our move from restricted to whole-market advice.”

Prudential FP’s new academy will accept a variety of existing employees, graduates and paraplanners. Coleman says that he expects career changers will come out of the programme as the most successful trainees.

He says: “They are an excellent choice because quite often it is these people who tend to do better, with the experiences they bring to the role.”

Connelly says the downside of smaller firms, particularly when training in-house, is the time commitment. He says Chase de Vere passes on client banks where possible, or looks to give new advisers clients through holding specific recruitment events.

He says: “It takes time for people to pass the relevant qualifications and to gain the necessary skills and experience to advise clients and so start to produce fee income business.”

He adds: “The benefits of having bright, young, adaptable, determined, well-qualified and professional advisers far outweigh any downsides.”

Expert view: Kevin Forbes, founder, Future of Advice

It all comes down to personal attributes 

Although our profession is seemingly dominated by white, middle-aged men, one aspect of variety we do seem to have is how they originally got into this career.

Apart from the fact that it seems it was mostly ‘by chance’, the pathway to becoming an adviser has tended to be as random as National Lottery numbers. This route has led to a broad church of backgrounds.

The main attributes an adviser needs are ethics, empathy, enthusiasm and an inquiring mind. People with all those can be found in a wide variety of places.

The demographics of the adviser population are similar to the rest of the UK – top heavy with experience over youth.

So, we built a complementary student placement programme to look to get quality candidates – with one year left on their degrees – some roles within quality firms, hopefully to entice them back permanently once they finish their course.

The main objection I still hear is around the ability of new advisers to sell, but that seems such an old-fashioned approach. There should also be young lawyers, doctors or accountants, all happily relying on the credibility of the entities that employ them to ensure they are competent.

If we truly believe we are professional then we should be lining up alongside these.

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  1. I liked Kevin Forbes comment”The main attributes an adviser needs are ethics, empathy, enthusiasm and an inquiring mind.” That’s what we want and what we have tended to focus on when taken on new starters. I’d also say that ex HM Forces and athletes are effectively a way of getting more than the average population of people with those attributes and several other key attributes which can make them a successful adviser.

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