Ex-bank advisers who have been ousted from their positions as major banks slash their advice offerings are pricing themselves out of the market with inflated pay expectations of up to £80,000 a year, according to the chief executive of Sussex-based advice firm Finance Planning Group.
Terry McCutcheon told FTAdviser he and his colleagues are constantly interviewing potential new adviser recruits, but warns many advisers who are coming from banks have unrealistic pay expectations.
He said: “Over the last year we have interviewed loads of banking advisers, and not many of them are realistic. They are all out looking for the same 50-80 grand a year.”
Mr McCutcheon estimates the market has been flooded by as many as 5,000 advisers who have lost positions at banks.
Finance Planning Group itself took on 16 new advisers last year, bringing the total to just under 80.
Although the company is constantly open to hiring new talented advisers including those formerly employed by banks, Mr McCutcheon says some of them have been “arrogant and overpaid”.
“Some are really good and really nice. The good ones have thought about it and come back to us but a lot of them treat it as just another interview. A lot of them price themselves out of the market.
“We take on many self-employed people and we have interviewed people who have made 60-80 grand a year advising people in branches. It’s a bit unrealistic in the current market.”
Another problem according to Mr McCutcheon is that bank advisers do not tend to have as long-term an outlook when it comes to client relationships.
He said: “Ours is much more long-term whereas a bank will do well and move on every few years and lose touch with the customers.”
Yorkshire and Clydesdale were the latest banks to exit the advice market, cutting 130 staff as part of a larger reduncancy plan.
Santander also announced it was closing its advice arm earlier this year, at the same time as the Financial Services Authority revealed it was investigating the bank in relation to advice failures.
Lloyds previously announced it will stop offering advice to customers with less than £100,000 to invest, and last summer (19 June) the Royal Bank of Scotland announced it was cutting more than 600 jobs from its financial planning service.
