More needs to be done to recruit young new talent into financial advice and create a sustainable future for the profession, according to industry experts in an Association of Professional Financial Advisers’ report.
It suggests that, as experienced advisers retire, the future cost of advice may rise without further efforts to ensure new advisers are in place and prepared to take up the slack.
The profession’s lack of entry points and clearly-defined career path are highlighted as barriers to attracting new advisers, but the report points to the increased professionalisation post-Retail Distribution Review as an opportunity to establish a framework for career development.
Chris Hannant, director general of Apfa, said that the post-RDR advice sector’s professionalism is positive as policy-makers are looking to advisers for help with the implementation of big shifts in policy.
“It’s important that advice is plentiful, well-qualified and available at a price that makes it accessible,” he added.
“For their part, consumers are now looking to financial advisers to aid their decision-making on a far wider range of issues, making it all the more important to think about a professionally-recognised career path that can help the advisers continue to meet their consumer’s needs over the next 10, 15 or 20 years.”
The report called for a focus on providing adequate training for specific roles, in addition to the formal qualifications needed post-RDR and making better use of government funding for training, such as that available under the ‘Trailblazer’ programme.
Fiona Tait, business development manager at Scottish Life, which sponsored the report, stated that post-RDR development and pension market changes mean consumers will be making harder decisions than ever before.
“It’s important that, like its customers, the financial advice industry takes the proper steps when planning for the future,” she added.
Speaking to FTAdviser, Simon Goldthorpe, executive chairman of network Beaufort Group, said that a big challenge for advisers is to recruit “if they want to succeed”, citing the new pension freedoms set to be implemented from April 2015 as a big driver for advice.
Mr Goldthorpe said he expects the larger firms to expand by 25-30 per cent.
He explained: “There will be downward pressures on charges due to competition. Advisers are in a world where people do not shop around for a new adviser, believing their current one is good enough. However, people have more access now via the web to make competition for advisers as fees are far more transparent.”
Beaufort is on the hunt for new young blood “with no liabilities or bad habits”.
“This industry isn’t on most people’s radar as it’s tiny so it’s difficult to find good advisers and paraplanners.”
peter.walker@ft.com, donia.o’loughlin@ft.com
