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IFA industry struggles to attract young blood

IFA industry struggles to attract young blood

The financial advice industry is facing a supply and demand problem in terms of new recruits, especially ahead of the potential rush for advice following April’s at-retirement reforms.

Speaking to FTAdviser, Martin Tilley, Dentons’s director of technical services, said it is difficult to recruit new blood into the IFA sector as many graduates and first jobbers are being put off by the amount of exams and long paraplanning apprenticeships.

Mr Tilley said: “RDR has meant that those advisers left are mostly very good, but generally quite a bit older and more qualified, which means that as they near retirement there is increasingly not enough supply to meet demand.

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“This is only exacerbated by the April pension changes, so I think the government should allow maybe £150 to be withdrawn from pension pots three to five years out from retirement to pay for an advice session to discuss decumulation options. This would be perfect for younger advisers to cut their teeth with.”

He added that the problem is also a perception one, with financial advice still not seen as a profession, although it now should be.

“Previously for every decent IFA there was a shark. The FCA had to use a sledgehammer to crack a nut in terms of regulation; but perceptions take a long time to change.”

Jason Witcombe, director at Evolve Financial Planning, stated that there are not many advisory firms that the public have actually heard of so it ends up being an industry that people stumble into.

“I can’t imagine there are many people in their last year of university saying ‘I’d love to go and work for XYZ IFA’,” he commented, adding that the regulatory burden is huge, but that’s not what is putting off younger people.

“It’s not really their problem anyway – that lies with the business owners. The problem is that it probably doesn’t even cross many people’s minds to look for a graduate job in the IFA sector.”

Simon Goldthorpe, executive chairman at Beaufort Asset Management, told FTAdviser that the firm was on a “major drive” to recruit younger advisers in order to bring his staff’s age demographic down a bit.

“There does seem to be a better appetite for the industry these days, I think becoming an adviser may be perceived as being a bit more sexy.”

He added that the post-RDR push for professionalisation appears to be working, with younger advisers and graduates keen to work their way up the rungs of qualification towards chartered status.

“I also think that the supposed regulatory burden is only really a worry for those with grey hair, younger people just seem to accept it as part of the job, and it’s only those who were around when it was the wild west that grumble about these things.”

Earlier this month, industry professionals told FTAdviser that IFA networks and wealth managers are struggling to find the quality and quantity of compliance staff to keep up with an ever-increasing regulatory burden.