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.
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.
Sue Whitbread, communications director for the Institute of Financial Planning, said this problematic obsession with recruiting only highly-qualified advisers with client banks had been a recurrent theme for a couple of years. She said: “Looking for highly-qualified and experienced advisers is tough as they are gainfully employed already and I think people underestimate the willingness of people to move.
“People do put down roots in a place and to attract them away from that you will need to offer them a lot.”
Ms Whitbread said this growing dilemma could be resolved if there were an increase in top-quality graduate entrants, who were currently “heavily sought after” and “snapped up straight away”. However, she said this also poses a problem because of the high level of training that was required to help them learn the ropes.
She added: “Recruiting graduates and newcomers to the industry requires a big training network to get them familiar with the process. Getting them trained in compliance and the practical elements of the profession involves a big investment of time and money and therefore is perhaps only suited to the larger firms.”
David Thomas, owner of Hampshire-based Chadney Bulgin, agreed that most firms found it financially difficult to bring in new recruits without experience or a client bank. He said: “There are some good people out there but they rarely come with client banks and unless your company has a client bank to give them it is very difficult as you simply don’t have the ability to earn.”
Mr Thomas’ solution to bypassing the difficulties of poaching top advisers from other firms involves buying up smaller companies. He added: “The other option is to go on the acquisition trail and look for smaller companies and actually find advisers by buying companies.
“This is actually what a lot of businesses are doing and you see a lot of acquisition activity out there and this is what they are doing to leapfrog over the recruitment process and get the advisers and client banks by acquisition.”
This could represent a decent option for those with the financial muscle to buy out smaller firms, but others will have to contend with picking out individual advisers on the market. The majority of active jobseekers in the field with some experience appear to be bancassurance advisers, who lost their jobs when the banks started dismantling their advice arms.
However, while they may not be completely new to the sector, they also require training. Anna Sofat, managing director of London-based Addidi Wealth, said the main problem with bancassurance advisers was that they have a completely different approach and need to adapt their way of thinking away from sales and more towards planning.
Ms Sofat’s firm has not recruited much in recent years, but did recently employee a technical adviser after a year of searching. She said the lengthy process was linked to a change in how jobs were advertised and the fact that there is no longer just one ‘hard print’ location where new vacancies appear.
In terms of the future and methods to get around this difficult issue of finding quality unemployed advisers, Ms Sofat said that graduate schemes were key. She said: “We should look to develop a five-year on-the-job training for graduates. You do your exam, spend the first year as an administrator, get your exam, go into paraplanning and then start gradually seeing clients.”
Even though graduates may have the technical expertise from passing exams, Ms Sofat said they require at least five years of hands-on experience to improve their people skills and bulk up their life experience. Without this graduates would struggle to convince successful clients on how to manage their finances.
Once again, however, this boils down to resources and how much a financial advisory firm is willing and able to splash out on training and developing the future generation. Most advisers agree that there are plenty of unattached advisers out there but, with resources tight and regulatory changes making time and surplus cash even harder to come by, these candidates are falling well short of expectations.
Unless a compromise can be found, either by lowering demands or incorporating some kind of economically supportive industry-wide apprenticeship training scheme, most firms will struggle to add to their ranks and newcomers will find it impossible to get a foot in the door. Everyone would love new recruits to bring in clients and hit the road running, but it is not realistic for every recruiting firm to expect it as a minimum requirement.
Daniel Liberto is a features writer for Financial Adviser
Key Points
* The general consensus on whether the financial advisory job market is flourishing has been met with a more divided response.
* Recruiting graduates and newcomers to the industry requires a big training network to get them familiar with the process.
* Even though graduates may have the technical expertise from passing exams, they require at least five years of hands-on experience to improve their people skills and bulk up their life experience
