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The value of skills development plans

Many adviser firms have skills development plans but they need to look to the long-term, not just the business’s immediate needs

You would expect adviser firms to understand the importance of planning for the future. So its no surprise that this year’s Personal Finance Society skills survey showed financial planners are embracing skills development plans.

The survey, conducted among 1,498 PFS members, found 49 per cent of adviser firms have a skills development plan in place and 22 per cent expect to have one next year. Among chartered firms, 75 per cent were found to have a formal skills development plan in place.

Chartered Insurance Institute public affairs manager Daniel Pedley says skills development plans can help firms identify potential future problems and shortages. “Firms with such plans will have a clearer idea of the skills they require now and in the future. They are able to consider the various ways in which to meet the future needs and decide which are the most appropriate in order to secure a better future,” says Pedley.

Financial & Legal Skills Partnership deputy chief executive Sarah Thwaites says: “All firms should have a skills development plan for the business as well as individual development plans for the people who work there. There is a regulatory requirement to ensure people are competent but firms should also be doing it for business reasons as trained staff give better customer service and improve profitability.”

Mark Walker-Smith, client director at training and compliance software provider Worksmart, points out that skills development plans can help with compliance and risk conduct, flagging up issues in staff training before they become a problem.

Walker-Smith says: “It’s not enough for advisers to keep a shoebox with a scrap of paper in it saying ’I went to this course and did three hours of CPD’. It needs to be evidenced and managed from a centralised place that dovetails to a firm’s training and competency policy.

“The management of risk can relate to competency and skills, because if an employer is not sure what an adviser has done, how can they be risk assessed? Some people within an IFA firm might have a training need but if the employer doesn’t know about it, they can’t fix it. When firms have been fined its not because they’ve set out to hoodwink anyone – it’s because they haven’t realised there’s been a problem. It’s important to identify problems so that remedial action can be taken.”

But as Pedley points out, there is a wider issue around skills development that goes beyond individual firms – increasing awareness of the need to bring on future talent. The advice industry’s immediate needs seem to be sufficiently catered for, with only 37 per cent of firms reporting skills shortages – the lowest level since the skills survey began in 2007 and a 26 percentage point drop on last year. But the long-term picture is less rosy, with many firms preferring to recruit experience over raw talent.

Hays Recruitment business director Parvez Miah says that although his adviser clients want to recruit people who will stay with that company over the long term and take on greater responsibility, they want to hire the finished article rather than trainees.

“IFA firms are looking for candidates to bring something to the party. If they have a large transferable client base and experience they will be snapped up quickly. They are lower risk compared to someone with no client base or experience,” he says.

Pedley points out that in an ideal world, skills development plans would look beyond immediate needs. “However, circumstances do not always allow this and given the recent economic difficulties it would not be unexpected to find some firms concentrating on short term survival,” he says.

Almary Green managing director Carl Lamb says it is difficult to find good quality employees and believes adviser firms need to spend time and money on skills development as a long-term investment in their business.

Lamb says: “We looked at this issue and spent time and money doing it ourselves with the launch of our graduate scheme – we wanted to invest in ourselves. There is a risk that in three to five years time that other firms could pinch the people you’re training but one of the advantages of doing it yourself is that you can train people into the mould of your business, so they don’t pick up bad habits.”

Lighthouse Group chief executive Malcolm Streatfield says: “Investing in people can help to introduce sustainability within firms through effective succession planning, which can bring rewards. But this must be offset against the potentially high costs to firms in training individuals.”



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