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Who will train the next generation of advisers?


The decline of life offices offering adviser training programmes raises questions about who will educate the next generation of advisers, experts say.

More than a third of advice businesses are looking to recruit untrained staff but few have the resources to handle such a process, warns support services firm Threesixty.

Out of 127 respondents, its survey found 38 per cent of firms are looking to hire inexperienced staff.

Threesixty managing director Phil Young says: “To take on someone inexperienced and supervise them and train them to be a competent adviser is an onerous task.

“What used to happen was that everyone had worked in a life office previously, where they had big training regimes that would also be quite technical.

“But there’s no longer the life company positions to get those people trained up because many firms have shut all that down.

“So now advisers are trying to train their own, but very few firms are geared up for that and there isn’t really a breeding ground for new people coming in to the industry. “

Mattioli Woods consultant Doug Ryan agrees. He says: “The normal flow of people coming in from insurance companies has reduced, mainly because insurers are looking to provide their own advice in future.

“So if you have firms that are wanting to grow, then they need to put in place strong training programmes, but its difficult to get that structure correct and not many firms have that.”

Paladin Financial Services managing director Tim Purdon adds that small advice firms, in particular, don’t make enough money to employ staff unable to generate income.

He says: “It’s going to be some time before that individual will be able to charge fees for his or her services and during that time they will be a loss to the business, and there’s a further cost to having someone in your office to supervise that as well.

“Most of us in the industry are of a certain age where we are approaching retirement, so suddenly there is going to be quite a gap in the market and providers might want to think about the problem themselves.

“Maybe they could be training people specifically so that they can then transfer into the adviser sector relatively easily. They are the only establishments that have the margins within the business to enable them to do that.”


There are new routes into the industry which are already being explored, not least the apprenticeship and graduate schemes and the emergence of roles like paraplanners. These allow people to contribute to the business at an earlier stage and some of those, but not all, will stay and develop further rather than moving on.

But it’s fair to say the intermediated advice sector is made up predominately of small firms who don’t have the resources to invest in developing groups of people in the same way as banks or insurance companies.

Within planning they cannot take that kind of broad approach and therefore need to be more restrictive with how many new entrants they can induct into their business.

That has been the case for the last two or three years but we are starting to see some more positive signs of new entrants coming into the market, and half of our new members last year were trainees to financial services.

There are a lot of firms that are looking at how they can bring new people into their respective processes.

The Personal Finance Society also has some apprenticeship schemes that are just in the process of being formally finalised, including one about to be completed around paraplanners.

We are one of the key sponsors for that and there is combined support for from across the planning sector because we need to find mechanisms to support both large and small firms.

It is as much a challenger for small firms to understand and to put some time aside, and we and some of the larger firms can play a role in setting the standards.

So while this has been an area of concern, it is something we are tackling, including talking to the Government about whether the costs and risks associated with giving advice are barriers to bringing new entrants into the market and deterring new firms from launching.

Keith Richards is chief executive of the Personal Finance Society



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There are 11 comments at the moment, we would love to hear your opinion too.

  1. What lack of imagination. There are loads like me who have recently sold their business, have the requisite qualifications and oodles of experience. They could be contracted to firms on a consultancy basis on a day rate to provide training for staff, both advisers, paraplanners and administrators.

    So what’s stopping you? I’m sure the rates are reasonable!

  2. Maybe the question should have been phrased “Who will want to train new entrants?”
    As the article says, most IFA practices are very small and cannot afford to do this (by way of time AND money). As for Graduates??? Give me a break.
    Experience has shown from the past that Graduates are mostly not suited to a life of sales. Yes sales. Thats what we all do at the end of the day, whether thats selling our advice, our service or god forbid, that most horrible of things, a product. It just doesn’t work (in the round to coin Hectors well used phrase). The vast majority of them do not bring in anywhere enough revenue to the business to warrant their salaries (which they all believe they have a right to) and then gripe when they are encouraged to look elsewhere. Keep them away from this business as they are (generally) utterly useless. They should stay to other business arenas for their own good and that of our business.
    As always the above is MHO. Others will have different views

  3. I wouldn’t worry about the training of new entrants, and who is to deliver it,

    My concern is……… their mental state, and the intentions ? anyone wanting to be and IFA, at the moment must be stark raving mad or a crook ? or both !!

  4. peter mulholland 7th August 2015 at 12:33 pm

    Remember CM advertising and promoting we don’t take on experienced advisers; we want professionals.
    And what happened?
    No sales
    Closed down

    Advisers have very special skills, technical and people skills. Those are hard to come by. For a long time they have not been recognized generally nor sufficiently remunerated. That’s why we don’t have new recruits and the wrong type generally are attracted to new positions.

    I have an economics degree. I started commission only door knocking. It was sell or find another job. Horrendous really. But the current state of affairs isn’t much better overall just different.

  5. We have an “apprentice” starting with us next month. He is 18 with good predicted A level grades but doesn’t want to go to University He wants to become a Financial Planner eventually but recognises that he will need to gain relevant qualifications, skills and experience.

    So he will start by learning all about the business by acquiring administration and technical skills before moving onto Paraplanning and Financial Planning. I reckon we are looking at the best part of five years before he starts to move toa client facing role

    He will be contributing to the revenue of the business during that time though because as part of the team he will be helping to ensure great client service and supporting the Financial Planners in their client facing role.

    We do need new blood in the profession and yes there is a business cost associated with recruitment but if we want a long term future we have to bite the bullet and invest in young people

  6. Bear Grylls is pretty clued up on how to live off very little!

  7. Universities. Isn’t that how other professions are trained?

    I reckon in ten years or so the path to being an adviser will be a related degree (nice revenue for the Universities) then possibly a Diploma through, or in association with, the CII or newly merged CISI/IFP (along the lines of the Legal diploma where you learn to translate theory into its practical applications) then a couple of years in a firm as a paid trainee again under the supervision of a professional body (if of course there are enough firms left!).

    Like other professions, going forward Advice will need an educational structure that encompasses all the constituent parts of the job such as ethics,law and regulation, investing, portfolio construction, life long financial planning through to retirement etc. etc. Universities look like the best candidates for the job to me.

    Hopefully the better ones will look to those currently in the profession to assist as part of that teaching as Mr Katz says.

  8. “It’s going to be some time before that individual will be able to charge fees for his or her services and during that time they will be a loss to the business”.

    That seems a bit short sighted to me. It also ignores the fact that trainees can free up time for those in client facing roles, which allows them to generate more fee income. Is it a cost or an investment?

  9. University graduates is exactly where employers SHOULD be looking. If the financial advice profession wants to progress it should be looking at employing the best educated talent. The lack of graduate schemes and training opportunities in the sector, has left it bloated with middle aged advisers. Younger employees are necessary in financial services to keep the offering relevant and current. The stereotypes used in previous comments are quite far off the mark, yet are indicative of the attitude prominent in the industry.

  10. I really think many a barking up the wrong tree when they talk of University Graduates joining our profession.

    1. The good graduates who are interested in financial services are snapped up by the banks, asset managers, accountants and consultants. Very few adviser firms could afford the starting salaries that these organisations offer. The alternative? Second class graduates. I have had experience of these. They don’t seem to be able to speak, write or spell decent English and their numeracy does leave a lot to be desired.

    Anyway by the time these graduates are trained, apart from the salary, they are costing the firm significant amounts of time, effort and money. Then of course I have noticed that a significant number of clients (at least those with money) are not too keen in having a spotty youth telling them what they should do with their assets.

    2. The real opportunity is as it has always been – recruiting from the more mature segments and not necessarily those who have only been employed in financial services. These are more likely to be people of substance with not only the cerebral attributes, but also a decent amount of experience and commerciality. Many in their early 40’s are looking for a second career and there are plenty of talented ladies who have now got shot of the kids and want to re-enter the world of work.

    As I said previously these seems to be a huge lack of imagination when it comes to thinking about the next generation of advisers. A 40 year old potentially has 20 or 25 years in front of them. Let the kids get dry behind the ears first.

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