As an adviser for nearly 34 years (and yes I did start at an early age “when rate books were the norm”) I am concerned that, as a profession, we are not doing nearly enough about succession planning – I wish I knew the solution, but there is a huge challenge looming for advisory practices in terms of bringing in younger advisers and getting them to the stage where they are capable and suited to taking over their older clients.
Quite a few advisory practices do not have a wide enough age spread of advisers to be sustainable in the long term.
According to Future Leaders partnership, the department for Business Innovation & Skills has approved some new financial services ‘Trailblazer’ apprenticeship schemes. Initiatives such as these are to be welcomed, and could prove to be very beneficial. Advisory firms could do well to have a good look at the available initiatives to see the relevance and suitability for themselves.
We do need new blood in the profession and perhaps we should be looking at attracting and training more mature advisers, not just school leavers and university graduates. After all, there is no reason that a new adviser could not be on their second or even third career change.
Many of the older clients (who as we know are likely to live much longer than previous generations) have complex retirement, investment planning and estate planning needs and will need ongoing advice for many years.
Advisers, it has been said, relate better to clients who are 10 years either side of their own age. It is not really surprising that clients themselves are more comfortable dealing with someone of a similar age and with similar life experiences. Does this mean, though, that some advisers will continue advising perhaps into their 70s or beyond?
There does appear to be a growing trend of advisers working well past what has been historically considered ordinary retirement age. As long as they are still capable, is there any reason why they should not continue to do so?
Those that I know who have continued advising beyond age 65 remain as committed and passionate as ever about what they do. I am not sure the same could be said about many other professions.
When I think of my own retirement (whenever that might be) a major concern is who I could confidently hand over my clients to. This concern is borne out of strong loyalty and a wish to protect my clients, some I have advised since starting in the industry (as it was then). It is not because of any belief that I am the only one who could look after them, but from a deep understanding and knowledge of these individuals and their nuances built up over time. This includes: what makes them tick, what their aims, ambitions, real priorities, fundamental beliefs and core values are. It enables me to be challenging when needed and therefore more effective as their trusted adviser. This level of understanding cannot be gleaned from fact-find questions alone.
Perhaps though, I am being too idealistic in trying to retain this depth of understanding of my clients. It is difficult in a post-Retail Distribution Review world to see how future advisers will be afforded the same luxury of time that I had to get to know their clients to the same extent. Indeed, it may not even be necessary to do so as we move into an era where social networking and more fleeting and superficial relationships prevail. This is likely to commoditise advice far more.
There is no doubt that many younger advisers have excellent technical knowledge and the ability to give good advice to older clients, but there does appear to be a shortage of soft skills training. This could help to overcome any potential age barrier when advising some clients.
Unfortunately, these days, largely borne out of necessity there are far fewer organisations focusing on soft and life skills than there used to be. The commercial focus on training appears to have switched primarily to technical competence and away from a more client-centric focus.
Our responsibility is to make sure we pass on the vital people skills that set us apart from other professions and to develop and adapt our business models to attract new advisers and paraplanners. These actions should help our future sustainability and in turn give us more choice as to when and how we retire.
Gavin Tisshaw is chairman of Executive Advisory Services
