According to one survey the average annual salary for an employed financial adviser was almost £63,000 last year – an amount that has me shaking my head in disbelief. Apparently it is down from approximately £66,000 the previous year, a figure that is even more unbelievable.
So I looked at figures compiled by the Office for National Statistics and HM Revenue & Customs and according to their data the average financial adviser is not paid anything like as much. The figure is closer to £35,000 according to various government agencies. If it was £63,000 it would be in HMRC’s list of top-10 occupations – but it is not.
I do think that adviser incomes will rise in time and for several reasons. Increasingly advisers will be engaged only for more complex advice, and this will cost more. As we have seen with the banks that provide execution-only services, there will be a lot more commoditisation of basic advice and products. This has been predicted for a long time but we are now seeing progress (if progress is the right word) in this direction.
Another reason is the increasing recruitment of younger graduates into the profession. This is something we should be encouraging. For several years some universities have been offering degrees in financial services-related subjects, and the numbers appear to be increasing. Unfortunately there are too few established graduate recruitment programmes, but there are some.
One downside to having a disproportionate number of smaller firms is that they are unlikely to have a properly structured graduate programme, but that should not stop them taking on fresh talent. There is definitely interest among graduates, they just need to be aware of what we can offer them as a profession. These days it is possible to minimise the risk of taking on a graduate by using one of the many graduate intern programmes, thus limiting the downside risks that can often accompany employing someone new.
We have recently taken on a new graduate who initially had no idea of the type of work we do. Having been exposed to the work we do (and sitting in on client meetings) she finds it fascinating and interesting. Originally she joined with administration in mind, but within a matter of weeks had decided what we do is so impactful on people’s lives, and so worthwhile, she is now studying hard for her first exam: regulation and ethics.
For her and her contemporaries it is not about the money, and if it was they would be the wrong sort. There is no need to bandy round figures like £63,000 to make the role attractive. Even £35,000 sounds like a fortune at that level. It is more about the challenges, the interest and the difference they can make in the world. It is also the ability to make deep personal connections with people. It is a role that is unlike most others in the world of money.
It is also the ability to make deep personal connections with peopleDennis Hall is managing director of Yellowtail Financial Planning
