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Profile: NMBA’s Tom Hegarty on how to attract 10,000 adviser recruits

New Model Business Academy managing director says we need a plan to replenish adviser numbers

Falling adviser numbers are a real concern for New Model Business Academy managing director Tom Hegarty. If left unaddressed, he warns consumers will lose out. Fewer advisers mean fewer people will get advice; there will be a lack of competition in the market and the cost of advice will increase.

He says: “The number of advisers has been reducing considerably over the last few years and the average age of advisers now stands in the mid-50s. If we don’t have a plan to replenish adviser numbers they will be gone in the next 10 years. To keep numbers at the same level, we need to recruit 10,000 new people within the next decade. That’s 1,000 people a year.”

The Government’s new-look apprenticeships are instrumental in replenishing the numbers, says Hegarty. Becoming an apprenticeship training provider was not in his initial plans for NMBA, the not-for-profit training and development division of The SimplyBiz Group.

But when the opportunity arose to register, Hegarty felt it was a good fit for the business. It received approval last month. He says: “It fitted in with our values; it is perfectly aligned to what we do. We support advisers through knowledge, skills and behavior, making people and businesses successful for the long term.”

The Government is targeting three million people to start apprenticeships across different industries by 2020, funded through an apprenticeship levy.
UK businesses with an annual wage bill of over £3m a year will contribute 0.5 per cent of the amount over that £3m as a levy.

Hegarty says: “It will build a pot of money for the businesses to allocate to training apprentices, so the Government doesn’t pay for it all from the taxpayer’s budget. If those firms don’t use that money within two years, it goes into the Government’s budget and will be available for non-levy paying firms to use.”

However, he points out funding is currently only being provided for large businesses that pay the levy. Earlier this month the Government paused the procurement process for apprenticeship training for smaller employers that do not pay the levy. This means advice firms, which tend to be smaller, will have to wait a bit longer. But he says at least the fundamentals are now in place. “Whether we start now or in six months, we still have time to deal with the problem of falling adviser numbers.”

Hegarty learned about financial services the hard way in his first job as a self-employed adviser.

“It was a tied sales role that involved cold calling and lead generation. All I was given was a desk and a phone. I didn’t even have any phone numbers.

“I’d phone companies to ask if I could speak to a Mr. Bloggs, for example, and there might have been a few people with that surname. So I’d go through the names with the receptionists and build a list of people. Every day I’d get 50 names – I didn’t know what any of them did – and I’d have to get them to come and see me.”

A lengthy wait for his share of the commission generated from policy sales meant he struggled to make ends meet, so he had to leave. However, he says it was great training.

“I don’t regret it, as it taught me the ropes at the hard end of the industry. I learnt how to generate business, soft skills and how to sell.”

If we don’t have a plan to replenish adviser numbers, they will be gone in the next 10 years

Hegarty then headed off to Taiwan for a year teaching English to earn some much-needed cash, and returned to financial services via an admin job in Australia with the bank Westpac.

Back in the UK, he built his career with Friends Provident and MetLife before joining advice network Tenet in 2011, where he became head of business development. So what does he think of the network model?

“It has its benefits as all advice firms need a minimum infrastructure to meet the regulatory requirements. Firms that are directly authorised have to do it all themselves. Service providers can deliver some of it but, ultimately, they are on their own.

“Networks help firms create business efficiencies and take away the onerous areas they have to get involved with; the tedious regulatory tasks, which frees up time to deal with clients. It’s good for small firms that do not have the infrastructure in the business itself. But they have to pay for it and it is more expensive to join a network than it is to buy services from a support services provider.”

Hegarty points out that, as networks take regulatory responsibility, they have to be highly capitalised to cover their increasing liabilities.

“One of the things networks are deemed to have is high compliance standards but many advisers believe it is unnecessary and that they ‘gold plate’ regulatory requirements as they are worried about the liability of firms not following their process.

“Some networks are more capitalised than others but only those that are capitalised will be in it for the long term. We have seen in the past where networks that are not well capitalised have failed.”

Overall, Hegarty sees the advice market as being in better shape than it has ever been. But there are challenges ahead.

“One of these is that adviser numbers will continue to fall in the short term, as apprenticeships will take years to make a difference. During that time many advisers and business owners will want to exit. So consolidators will continue to grow and take over those client banks. We will see a difference between larger restricted advice firms and smaller, mainly independent, firms. Those smaller IFA firms may diminish a little bit and the consolidators will take over the client banks.”

Five questions

What is the best bit of advice you’ve been given in your career?

Have integrity in everything you do.

What keeps you awake at night?

Being excited about new ideas and how good they are going to be.

What has had the most significant impact on financial advice in the last year?

Probably defined benefit transfers.

If I was in charge of the FCA for a day I would…

Make it mandatory in the guidance notes to give examples of best practice, even in a concise format. What does good look like?

Any advice for new advisers?

Focus on the customer and everything else will fall into place.


2016-present: Managing director, New Model Business Academy

2011-2016: Distribution & development manager then head of business development, Tenet

2011: Sales development manager, MetLife

2003-2011: Business development manager, Friends Provident

2002-2003: Mortgage adviser, Countrywide Mortgage Services

2000-2002: English teacher in Taiwan; admin role at Westpac bank in Australia

1999-2000: Financial consultant, City Financial Partners



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There is one comment at the moment, we would love to hear your opinion too.

  1. Money Guidance 2nd May 2017 at 4:21 pm

    Two timescales are mentioned in the piece for smaller firms to have access to apprenticeship funding – 6 months and 2 years. Which is the more likely?

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