Nic Cicutti: Is it getting harder to attract new advisers?

Nic Cicutti

A few decades ago, when I first started riding scooters to rallies up and down the country, I remember a flyer handed out at one event inviting me to join the Old Bastards Scooter Club.

The OBSC, the leaflet informed me, was aimed at the admittedly tiny minority of scooterists then over the age of 25, who might be getting bored of kids barely old enough to buy a shandy puking on their shoes after a few too many.

Instead, prospective members were promised a social scene in tune with their more mature age group – although it was not clear precisely what was on offer: less projectile vomiting, possibly.

Back then, I was still a year or two off the OBSC’s age limit. I vowed I would rather shoot myself than join an old farts’ club like that. How times change: as I look round many of the scooter events I still go to, I would be delighted if the average age of those attending was under 45, never mind 25.

But as any adviser trying to hire a new recruit to service the needs of an expanding business knows, attracting fresh talent is a pretty thankless task.

Does it specifically need to be young blood? I ask after reading last week’s article by Katie Marriner in Money Marketing, describing her difficulties in trying to understand the demographics of today’s adviser community.

Katie quoted figures from the Personal Finance Society showing the average age of its membership was 47, while that of newer recruits who have joined since March 2014 is 37.

Strangely enough, I remember an article by former PFS chief executive Fay Goddard more than four years ago, in which she stated the average age of her organisation’s members was 47 even back then.

Statistical experts will no doubt wish to comment, but my reading of those numbers is that for those who joined after March 2014 to bring the overall figure to 47 the average age of all other PFS members must be significantly older than it was back in 2012.

That, or the total number of recruits after March 2014 is so small it has little or no impact on the overall average, which remains the same as it was almost five years ago.

What is happening? As Katie discovered, the available data is hard to analyse. My own guess is  attracting young advisers is, if anything, harder than it was a decade ago.

“When people reach their 30s and 40s and are old enough to understand they need advice and seek out an adviser, do they necessarily want someone in his or her 20s to advise them?”

Giving advice, as distinct from some of the sexier areas of financial services like working in the City, has never been seen as an attractive proposition by young people, especially when other job options seem so much more inviting.

Besides, the vast majority of twentysomethings are uninterested in receiving advice: why would they want to learn how to give it to someone else?

And when they reach their 30s and 40s, and are old enough to understand they need it and seek out an adviser who will give it to them, do they necessarily want someone in his or her 20s to advise them?

Apfa director general Chris Hannant’s comment about a “grey hair challenge” is right: unless I am totally convinced the “kid” opposite me is incredibly smart I am much more likely to want someone to advise me who is at least my age, or older.

That said, in the past couple of years I have met one or two stunningly good paraplanners in their early 30s who were, in my opinion, far more knowledgeable and skilled than the advisers they worked for.

As for so-called “soft skills” like asking “probing questions”, it does not take years to acquire them: a few months, not years, of listening and learning from someone who does that sort of thing regularly is what it takes.

In any case, the real skill does not lie necessarily in asking the right questions but in listening to and understanding your client’s answers.

There are too many advisers with decades of experience under their belts who have lost the art of being genuinely reflective about what their clients are telling them.

The answer, then, is less to do with trying to focus on youth than about identifying the right kind  of adviser you need to join your team.

Here, Katie’s article raised a number of interesting options, including that of targeting potential recruits from certain occupational groups with potentially transferable skill sets, like the armed forces.

The other key aspect is training. In the past the industry relied far too much on a steady stream of recruits from banks and insurers, who would keep training advisers up to a certain level before they decided to go independent.

The reality is that even if banks are prepared to remain the industry’s adviser transmission belt, numbers coming through will be far lower than in the 1980s and 1990s. For advice to be seen as a genuine profession, the industry needs to develop its own centralised training structures similar to Intrinsic’s Financial Adviser School.

Perhaps this is an area for trade bodies to get involved in helping to co-ordinate, a bit like the OBSC tried to soften up people like me into joining many years ago – hopefully without the projectile vomiting this time.

Nic Cicutti can be contacted at nic@inspiredmoney.co.uk