‘Business-minded post-grads wanted for exciting career in financial advice. Requires ability to breeze through exams, sell ice to Eskimos, create long-lasting relationships and cover their backsides. Aptitude for using crystal ball
to forecast future regulatory changes will also be a plus. Preferably equipped with a bulging black book of wealthy contacts. Sense of humour mandatory.’
Where are our new advisers going to come from?
RDR, preceded by the lingering threat of RDR, has done its best to deplete financial adviser ranks with banks pulling out of the advice market and many advisers opting to retire earlier than originally planned. With fewer clients willing to pay for financial advice, adviser numbers are bound to decline even further over the ensuing years. We could argue about the speed of change and the numbers involved, but broadly speaking, few would disagree with the logic.
But financial advisers are the lifeblood of the life, pensions and fund management industries – so what is the industry doing to swell the ranks of this critical “distribution” channel? “Not enough” would be my Readers’ Digest summary.
The banks don’t seem to be that bothered. Most life companies are doing a great deal of talking on the subject whilst dusting off plans to augment the adviser channel with salespeople of their own. The networks (the vast majority of whom are strapped for cash) seem to be more interested in trying to poach advisers from one another than recruiting, training and developing a new generation of professionals.
A couple of notable exceptions. The first one is the Sesame Bankhall Group. Under the leadership of Lisa Winnard, the group launched The Financial Adviser School almost two years ago with the sole aim of bringing new blood into the industry, and I for one think they should be applauded.
Lisa and I tried to get this off the ground back when I was at Sesame in the mid-noughties but were unable to convince my fellow execs and the non-FS shareholder who owned the business back then.
“I have attended a large number of industry ‘new blood’ meetings over the years and whilst there was a great deal of talk on the subject, no one seemed to be actually doing anything!” Lisa remarked to me recently. “The direct salesforces of Pru and Allied Dunbar used to be the training ground for the industry. Once these sources had dried up, the banks stepped in to fill the gap for a while. Now that they too have stopped, the flow of new advisers coming into our industry had slowed to a trickle.”
“There are plenty of places where prospective advisers can go to obtain qualifications. However, no-one was providing future advisers with the practical, rounded business skills they would need to be a successful adviser – selling, marketing, service, day-to-day business management, interpersonal skills, and a realistic appreciation of what it means to be regulated.”
The FA School is supported by Zurich, Aviva, Friends, Aegon and Partnership. It offers different programmes to suit the needs of the sponsoring firm, including an 18-month diploma programme, an eight-month Mortgage and GI programme, and a seven-month “Competent Adviser” programme. The full diploma programme blends classroom learning with real-life experience within the IFA businesses that are customers of the Sesame Bankhall Group. The way that the curriculum is designed, students become value-adding and revenue-generating advisers very early on, starting with helping clients to meet simple needs such as term life and working their way into more complex areas over time. 60 students went through the school in its first eighteen months. A further 70 are due to start in 2013. Within three years, Lisa plans to have had brought 400 new advisers into the industry.
The other market leader who understands the value of new recruits is St James’s Place. The SJP Academy attracts self-motivated professionals who are looking for a change of career and wish to start their own business in wealth management. It is an incubator for new SJP Partners. New recruits are expected to take RO1 themselves before commencing the two year Academy programme during which time they will achieve the necessary qualifications, be trained in SJP’s propositions, learn how to build and run their own business and acquire advisory skills. After six months in the classroom, they are introduced into the field under the guidance and supervision of SJP mentors. Upon graduation they will then have access to the full range of firm’s acclaimed business support to help them develop their advice business within the SJP umbrella.
The SJP Academy is not for the feint-hearted, but then neither should it be. Financial advice is a profession, not a hobby. The SJP Academy has three intakes a year with 15-20 new recruits per intake and the average age is 38.
Recently, SJP have also launched their “Next Generation Academy”, aimed at assisting existing SJP Partners with succession planning – quite literally training the next generation to step up and take over the running of an SJP advice firm. The first intake last October saw 16 students with an average age of 24 (mainly sons and daughters of SJP partners) commence a one-year training programme. Two intakes are planned a year.
Other programmes do exist, but the vast majority of them seem purely to focus on assisting advisers to gain the qualifications they need – not in bringing new blood into the industry and transforming them into “competent advisers”. For example, the Aviva Future Adviser Programme provides a six week summer internship for ten graduates and last year gave a total of 35 graduates “membership of the Aviva Financial Adviser Academy”, Aviva’s vehicle for helping advisers to pass exams. I suppose it is a step in the right direction.
The Financial Skills Partnership is a much bigger leap in the right direction. Their Graduate Foundation College provides new advisers with a ten week induction course designed by the industry that sees them “graduate” with the financial services, regulation & Ethics module of the industry qualification, currently provided by the CII or Calibrand.
It is hoped that the graduates will be encouraged to continue with their studies and it is the responsibility of the adviser firms to transform them into functioning, revenue-generating financial advisers. After the initial ten weeks, the unemployed graduates are put through a robust assessment process which allows the firms to take new talent into their firms with no recruitment costs and minimal risk. Firms are then given a range of training support to assist with the internship including a year’s free membership to the FSP, an internship toolkit, a learning management system from Redland, apprenticeship toolkit, work experience toolkit and an interactive T&C scheme toolkit.
Operating out of Birmingham, Cardiff, Leeds, Edinburgh, Manchester, Bristol and London, the Graduate Foundation College processed 187 potential advisers in its first intake and hopes to have had 750 potential new advisers through its programme by the time the pilot ends next April.
Building a career as a professional financial adviser should be an attractive and rewarding option for a large number of people; and not just for graduates but also for people looking for a change of career, those leaving the Armed Forces and swathes of people who are being made redundant from life companies and banks. The recession and the changes being forced on this industry should be providing the rich source of the new blood that we badly need.
Whilst the Financial Skills Partnership is doing an admirable job, I cannot shake the feeling that we need the providers to do much more than tutor advisers to pass exams and we need many more networks, service companies, nationals and advice firms to follow the lead of Sesame and SJP. Surely the future of the industry depends upon it.
Campbell Macpherson is managing director of Campbell Macpherson & Associates. His career has included executive roles in Openwork, Zurich and Sesame