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The real world

A few weeks ago, a right-of-centre thinktank published a report in which it claimed to have identified a new social group which, to coin a phrase, it called the “ipod Generation”.

The acronym referred to young people who, according to research by the Reform thinktank, are “insecure, pressured, over-taxed and debt-ridden”. Reform’s central premise is that the Government’s current policies on tax and spending are working against the UK’s under-35s.

This is because the so-called welfare bargain, the idea that your taxes will eventually be used to pay your benefits – has broken down. One of the key areas where this breakdown has occurred is in the opportunities offered to those leaving higher education.

While previous generations of teenagers enjoyed higher education funded by the taxpayer, young people today face university tuition fees and a declining return in the salary advantage they will get from their degrees.

Reform’s research claims that the so-called “graduate premium”, defined as addit-ional lifetime earnings for those with degrees, is likely to average just £140,000- £160,000, far short of the £400,000 suggested by the Government when it introduced tuition fees two or three years ago.

Indeed, some graduates would have done better to leave school at 18 and get proper jobs instead.

I found myself thinking about the ipod generation last week, reading a report in Money Marketing’s Professional Brief supplement, in which the Institute of Financial Services was quoted as saying that university students hoping for a career in finance need to graduate with at least a 2:1 degree if they want to be successful.

Apparently, competition for jobs is so great that any graduate with a so-called “Desmond” – a 2:2 – will struggle to land the job they want. Indeed, so great is this sea change that even my old mate Nick Bamford of Informed Choice has been “forced” into obtaining an Upper Second in order to continue to be successful.

Jokes aside, reading the story left me with contradictory feelings. On the one hand, my initial reaction was, quite right. It’s about time that these wannabe financial advisers join the real world, where everyone else needs an Upper Second to get on in their chosen career. If it’s good enough for someone entering the legal or accountancy profession, it’s good enough for the financial services industry.

On the other hand, it’s important to note how comments like those from the IFS actually mark a major turning point in relation to who works in financial services. Essentially, it means the old(er) generation of adviser, someone who joined the industry after a succession of badly-paid or unrewarding jobs and rapidly discovered they had a knack for this line of work, will soon be no more.

In one sense, that’s rather sad. There are scores, perhaps hundreds of people I have met over the past 15 or 16 years who are highly professional advisers, good at their jobs, have lots of empathy for their clients and are extremely knowledgeable about a wide range of financial planning areas. Yet, aside from the odd O’level and the now-devalued FPC, they don’t have many qualifications to rub together.

Today, the minimum that any professional firm is likely to insist on from those it hires will be not just an FPC or equivalent but at least one, possibly two or three additional exam passes in related subjects, leading to AFPC level. Or at least, a successful candidate must aspire to reach that level within a short period after being taken on.

Yet even that level of qualification is now becoming superseded by the drive towards degrees. Although I don’t yet know of any IFA firm that requires a financial services-related degree from any new job applicant, it can’t be long before this happens.

Is this a good thing? Just before I started as a journalist, my industry didn’t require a degree-standard education, certainly not in local newspapers. Nonetheless, the older journalists I worked alongside were highly skilled, able to do their work at least as well if not better than the growing influx of graduates, myself included, who were flocking into jobs that previously required only A’ levels and, before that, just O- levels.

Today, scores of media studies degree courses tend to provide all the new entrants into my line of work. In the course of this change, something has been lost – that sense of being rooted in the local community, of being on an equal footing with the people you interview and write for.

Of course, financial services is a different game. If IFAs are to chase after the more affluent market, the chances are that apart from self-made men and women who left school early, their clients will have university-level qualifications – and aspirations to match. Having a degree becomes the new minimum standard if you harbour ambitions to sit down as an equal in front of your client.

Having a degree also ensures that you get the luxury of several years to refine your knowledge and understanding of key financial issues, with additional on-the-job training allowing you to refine that knowledge into something more practical.

In that sense, the new drive towards university qualifications is a positive thing. For younger people looking to enter the industry, it is a definite line in the sand between the old way of doing things and a new, potentially more ethical approach to financial planning and advice.


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