An IFA has joined calls for there to be a simpler route for graduates to come into the financial services industry due to the higher barriers to entry for fresh blood coming into the advice sector as a result of the higher Retail Distribution Review qualifications thresholds.
In an interview with FTAdviser, to be published later today (18 October), Debbie Day, IFA at Hoskin Financial Planning, warned that it is difficult to attract new blood due to level four qualifications being timely and costly to attain.
Ms Day, who spent 23 years as an adviser at Netwest before joining Hoskin in January, said it was the lack of new advisers coming into the market following the exit of banks from the sector rather than any changes in terms of remuneration for advisers that could cause the advice gap to substantially widen in the future.
She said: “I think that is a worry. I class myself as one of the younger ones who gives financial advice but I am still in my 40s... there are certainly not many people much younger than me coming through.
“The banks have obviously pulled out of the equation and they did an awful lot of recruiting, especially in the early 90s, and now that’s gone where are people going to come from? That is a concern for the industry itself.”
The issue of a lack of breeding grounds for new advisers has been cited a number of times by senior industry figures.
Malcolm Streatfield, chief executive of Lighthouse Group, previously told FTAdviser that the costs of bringing in a graduate that would not be able to give full advice while training for the first year or two made this potential solution uneconomical for firms.
Mr Streatfield therefore similarly called for a “simplified” advice regime endorsed by the regulator that would allow certain advice processes, perhaps those transacted largely online, to be carried out under supervision by new advisers while they studied to become level four qualified.
Giving evidence to the Treasury Select Committee, Martin Wheatley, chief executive of the Financial Conduct Authority, admitted there are “some issues with the withdrawal of the mass market distributors from the retail market”.
Mr Wheatley pointed to a range of low-cost online solutions that we being developed to meet this demand, giving rise to speculation that the regulator could be supportive of a broader simple advice regime.
Ms Day, who stressed that she was broadly supportive of the aims of the RDR, also highlighted the lack of a long-stop as a possible deterrent for younger prospective advisers.
She said: “It may put some people off as there are other professions that people can go into where they haven’t got that concern, but I would like not to think so really because you always do what you think is right for your clients in that moment in time.”