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Mind the gap

September is always a funny month. For many advisers it is a return to work after a few weeks of holiday in the sun (and miraculously this could even have been in the UK this year – what a great summer) and for some it is also the time when they pack their offspring off to university.

For the first time in 12 years I have no children leaving for university. The last one finished her postgraduate certificate in education this year and has now entered the classroom as a fully-qualified teacher. Ironically she was more nervous this year than during all her time at university.

Of course this time of year is also when newly-qualified graduates are looking for jobs and interesting professions, and this is really where I want to focus this month.

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Let us be honest, people need help and advice and although the Money Advice Service may do a sterling job it will only offer guidance, as will many of the ‘consumer focused’ websites. For some consumers this may be enough and certainly auto-enrolment will cater for the pension needs of many but what remains is a significant advice gap which the existing advisory community is too small to satisfy. Even the FCA appears to accept that this gap now exists as its chief executive, Martin Wheatley, said so in front of the Treasury select committee earlier this month.

Of course the size of the gap is still undefined but in my opinion it is not confined to the masses on average, or just below average, earnings, but it also extends to what we would regard as high net-worth individuals. In the past I have carried out research that demonstrated that advice was needed at these higher earnings levels but only a small percentage of high net-worth individuals actually have a financial planner or seek advice. This was recently brought home to me when I read a report that said that a high percentage of Wonga’s customers were higher-rate taxpayers. (For those unfamiliar with Wonga, it offers individuals instant cash at horrendously high interest rates with very short settlement periods, hence why its is often referred to as a ‘pay day lender’.)

Readers will be aware that I have spent the past two years chairing a work group looking at the advice gap and the need to fill the space created by the FSA for so-called simplified advice. Once again, at this year’s Gleneagles conference, the subject will be discussed but today I want to concentrate on expanding the numbers of fully-fledged financial advisers and planners.

We clearly need more advisers but where we do we get them from?

An obvious source is university graduates. In today’s complex financial world new recruits to our profession will need to be of graduate calibre (even if not graduates) who can assimilate and analyse. Clearly they also need to be able to communicate well and many universities now devote time to developing such skills.

I was therefore pleasantly surprised to see an advertisement for trainee advisers in the careers and academic (degree courses) section of the newspapers Metro and the London Evening Standard. The advertisement was well laid out with a photograph of a degree scroll and graduate’s mortar board, and a strong heading: University challenged. Have you chosen not to go to university? Have you recently graduated? Have you considered a career as a Financial Adviser?