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Catch-22 situation for new recruits

Fears of a mass exodus from the financial advice profession has been under question in recent months after an unexpected slew of positive data. First the FCA revealed a 6 per cent increase in financial advisers since RDR was introduced and then, to top it all off, the Association of Professional Financial Advisers claimed that almost a third planned to expand their businesses in the next six months.

These findings certainly went against most expectations and, in line with the UK employment market in general, point towards a period of prosperity and growth. On the ground, however, the general consensus on whether the financial advisory job market is flourishing has been met with a more divided response.

National recruitment firm Idex Consulting has noticed a rapid increase in both job vacancies and candidates in recent months, but also claimed that this has been undermined slightly by a catch-22 situation. According to business manager Graeme Hyland there are plenty of jobs and good candidates, but recruiters are ruling out most of them.

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Mr Hyland said: “The catch-22 situation we find ourselves in is when companies lock their advisers’ clients in so they can’t take them with them, and then at the same time they are only interested in advisers who can bring clients. There are opportunities, just not many for advisers without clients.”

Because of this strict criteria, Idex said that newcomers and graduates needed to start from the bottom at administrative level. This may sound like a reasonable path for newcomers to obtain the required experience, although not all potential employees are convinced that it is feasible and beneficial for the company.

Jason Witcombe, director of London-based Evolve Financial Planning, agreed there were plenty of candidates, before adding that the majority were not unemployable. He said: “We get approached, either through cold-calling or cold-emailing, by loads of people wanting a job but the majority don’t have client bases and we are not comfortable taking on people with zero clients.”

“It’s a significant investment and expensive to take on advisers without clients. Advisers cost money to train and if they are coming on board with zero clients, which means bringing in no income, then it can become a problem. It costs a lot to employ someone without clients and the time it takes to build up a client base is significant.”

Mr Witcombe said most new entrants to the profession were not graduates but those who choose to embark on second careers. For these types of individuals he recommended starting as an administrator and then steadily moving up the ranks from a paraplanner to adviser, yet he said that this type of investment and training could only be provided by the bigger firms.

Seeking employees who can immediately add to the business and make money is naturally a priority for most, although it poses a challenge because they are highly sought after and likely to cost significantly more. The likelihood of an adviser with at least three years of experience, a healthy client bank, level-six qualifications and not already having a job is slim, which makes it all the more difficult for demanding recruiters.