Fighting over those in financial services, rather than garnering interest from outside it, is asking for trouble
When you ask the owner of an advice firm what concerns them most, they respond with one of two answers: regulatory change and recruitment. For once, I am going to talk about the latter.
Here are the main problems as I see it.
No formal career path
There is still no formal career path to becoming an adviser. Beyond a few qualifications and a regulatory requirement to be supervised, once you join an advice firm there is no consistency around what will happen next.
Some firms do a brilliant job of recruitment; some are terrible. Financial planning is a job that offers great flexibility, potentially huge earnings and an interesting, varied pattern of work for, frankly, far less effort than every other profession.
People should be queueing to enlist, especially given the difficulties many have finding employment straight out of university. But it is very hard to sell the concept of becoming a financial planner to graduates, when no one can honestly say what on earth will happen when they join a firm.
This is very different from law, architecture or accountancy, where there is a fairly set pattern for on-the-job training and exams, with clear milestones and salary increases along the way. These professions also have their good and bad employers, but consistency gives them a head start.
Advisers often not great at looking after staff
A common complaint I hear from employees is: “I wish they looked after me as well as they look after their clients.” I have seen impeccably mannered advisers with excellent listening skills treat their staff like dirt.
Providing someone with your full attention can be tiring, but slipping into bad habits once the client leaves the room tells others around you that they are not as important.
And despite espousing the benefits of insuring, saving and planning for the future, many advisers provide a terrible employee benefits package. Throwing money at it is not the answer, either – just ask the consolidators. Holding on to existing staff makes recruitment a less pressing problem.
Lack of on-the-job development
Professional bodies provide qualifications but the pinch point for employers and prospective employees is supervision.
Passing exams is easy for new entrants fresh out of education, and relatively cheap. There are multiple options offered by many different professional bodies, all competing to offer the best route to qualification. There is no shortage of exam training material.
But the real problem and cost is in on-the-job supervision and development. In a market still dominated by small firms, few have the time, resource and expertise to train beyond the regulatory minimum, with a number looking to pass the cost on.
Many lose heart having lost trainee advisers after a couple of years. Many larger firms and networks have reached capacity and are selective, focusing on maximising profits now, rather than investing in the future. Where they do, the emphasis is on recovering costs and creating lock-ins.
All of the above means there is a fight over the current people in financial services rather than any real interest from outside it.
There is no reason to assume it is only graduates that should be targeted, but given almost 50 per cent of the population now attend university it is a pretty good indicator if there is limited interest from them.
There are some really good firms doing great things, but without a co-ordinated plan it is scratching
In the meantime, St James’s Place is hoovering up a number of the few young planners available with buy-now-pay-later client banks, and new starts and hybrid robo-advice firms are starting to turn the heads of those looking for more flexibility – young parents in particular.
Personal Finance Society figures last year showed that only 2.1 per cent of people with a statement of professional standing were under 30. There are almost the same number of advisers over the age of 60 as under 40.
With so many firms already at full client capacity, perhaps initiatives such as Financial Planning Week would be better used for creating careers, not clients, for firms.
Phil Young is managing director of Zero Support