Six full months since the Retail Distribution Review came into force and a theme has started to emerge from the firms I speak to.
The RDR hasn’t been the disaster some commentators predicted. In fact, many firms I speak to in the new environment say they are looking to expand, take on new advisers to fill out their ranks and enhance their offering.
One problem comes up again and again, however: most say they are having trouble finding advisers of the level required.
Hargreaves Lansdown big-cheese Ian Gorham told me he wants to take on more advisers but is having trouble finding adviser jobseekers who meet the minimum requirements for new joiners, and that this is the biggest challenge to the expansion of the business.
Note that he said this is not just one stumbling block, but is the biggest challenge.
At least two other advisers have told me they want to increase adviser numbers but have been inundated with ex-bancassurance advisers looking for high salaries and cushy jobs where clients come to them.
In March, adviser Terry McCutcheon told me he and his colleagues are constantly speaking to potential recruits and that he’s found bank advisers expect to earn up to £80,000 a year.
It isn’t just the search for good individual advisers either, but for those acquisitively expanding there are apparently problems finding healthy firms.
Simon Goldthorpe, executive chairman of the Beaufort Group and managing director of sister advisory firm Beaufort Asset Management, repeated this sentiment in an interview with FTAdviser when he said that his firm is also looking to expand by taking six more firms into the fold, but has had to turn them away.
He’s looking for firms with a good turnover, solid history with minimal regulatory discipline and low complaint count, as well as Chartered status.
According to Mr Goldthorpe more directly-authorised firms are coming to him saying they are struggling to keep up with the compliance demands under RDR rules.
So where are all the well-qualified advisers? Maybe they have buckled down and carried on with things. After all, advisers with successful businesses - the type firms are looking to acquire - might be more likely to keep to themselves. If it ain’t broke don’t fix it.
Is it that there are fewer RDR-appropriate advisers out looking for jobs? Or could it be that the job market has been flooded by advisers from banks who are learning a harsh lesson about the real world?
One thing is certain: If you are a highly-qualified financial adviser with a solid client book, it might be a good time to think about selling and strike while the iron is hot. There are a lot of big firms out there looking to hoover up smooth-sailing books of business. I don’t know how much they are willing to pay but
If the level of demand I’ve heard anecdotally is consistent across the sector then it is a seller’s market.
