The news Standard Life is launching a financial advice arm following its acquisition of Pearson Jones shows the industry is turning its attention to the growing need for advice in light of the pension freedoms.
Standard Life intends to create an academy and take an active role in recruiting and training people for a career in financial advice. But is the industry as a whole currently doing enough to provide that career path?
Chartered Insurance Institute relationship manager for education Caspar Bartington says: “Companies today can engage with the future workforce, which is something the financial services sector has not done a lot of in the past.
“They can recruit apprentices and support the school events we do. We can help them make contact with schools and provide links to universities so they can talk to students in lectures or seminars.”
New entrants cannot be put into a client-facing role straight away, so the first step is often an administrative role. From this, they may choose to move into paraplanning and, eventually, into financial advice.
The Financial Skills Partnership develops apprenticeships in providing financial services, which are available for people over the age of 16 who do not have a degree. The National Apprenticeship Service funds apprenticeships across all sectors in England. If an apprentice is aged 16 to 18, neither the apprentice nor the employer has to pay for the training but employers of older apprentices will typically pay half the cost of the 18-month programme.
Bartington says apprenticeships provide a very structured way for school and college leavers, or second jobbers, to get hands-on development that leads to the completion of CII qualifications.
“This is a good model as the employer has someone qualified to support that person. It gives confidence to someone not long out of college because they have more support than they would with a standard qualification,” he says.
The Beaufort Group has been involved in the development of the Government’s new Trailblazer standards for apprenticeships. Executive chairman Simon Goldthorpe points out apprentice-ships allow firms to develop employees to fit their specific businesses as apprentices have not learnt bad habits from elsewhere.
Bartington says the number of graduate schemes has increased since the RDR as advice firms have more time to look at succession planning and developing the talent in their businesses.
Internships for university students are also increasing. These involve firms taking on someone for a short period, usually up to three months but possibly as long as a year.
“Employers get to see whether someone can work in the business or not. It’s like an extended interview,” says Bartington.
St James’s Place, meanwhile, runs a six-month core academy programme for second careerists who want to become SJP partners. It also runs the Next Generation Academy for people that existing SJP partners eventually want to take over their businesses. This programme lasts 12 months.
The academy was originally intended for the children of existing SJP partners but now candidates do not have to be relatives.
SJP development consultant and academy head Keith Riddell says there are no age requirements but candidates are required to pass the RO1 exam to show they have the academic aptitude to pass RO2 to RO6. At the end of the programme candidates will be diploma qualified.
He says: “We look at developing client-facing skills, not just technical knowledge. Candidates learn to use their knowledge in real life and apply their technical knowledge through case studies.”
Building a business
After a few years in the industry some advisers may want to set up their own firm but find it difficult to raise the cash. The Beaufort Group can help by lending them the money and providing the infrastructure, including the back-office system and paraplanning.
Goldthorpe says: “If they are confident they can build a client bank, we will do the rest and provide them with a cash buffer. If they want to get directly authorised we can help them do that.”
The risk is once a young adviser is established, Beaufort may never see them again but the firm hopes the entrepreneurs will continue to use its various services once they are established.
Adviser View: Carl Lamb, managing director, Almary Green
We take on two graduate trainees a year. We’ve done that for the last two years. All of them have a first in maths and social skills are also important – if you can’t interact, it’s a dead loss. Over three years you can ascertain if people have got the calibre to be trainee advisers. Our graduates start learning basic administration in the first year and over the next two years they move on to paraplaning. After three years the danger is someone else could poach them but you’ve got to look at the age of the people in your business and invest in the future.