Professional bodies representing the advice sector are hopeful a lack of new blood coming into the industry could be solved by a forthcoming government levy to boost the use of apprenticeships.
From 6 April 2017, the apprenticeship levy will require all employers operating in the UK with a pay bill over £3m each year, to make an investment in apprenticeships.
It will be charged at a rate of 0.5 per cent of the annual pay bill, with a levy allowance of £15,000 per year to offset against what firms must pay.
Steve Jenkins, director for financial services and insurance markets at the Chartered Insurance Institute, said that while this will only hit larger firms, the government drive to double the numbers of apprentices by the end of this parliament is an opportunity for smaller businesses to recruit new staff.
“Much of the current crop of advisers came across from banks and insurers’ direct sales forces, but those routes have dried up in recent years, which begs the question of where the next cohort is coming from?
“The profession has to reproduce itself to evolve and we think this is a great way to help that happen, so the CII will support the government in making apprenticeships a viable alternative to graduate trainees,” he added.
The Personal Finance Society surveyed 417 financial adviser firms at the end of April and start of May, finding three quarters would be interested in taking on an apprentice.
More than two thirds (68 per cent) said they were more likely to use a new apprenticeship to develop a new member of staff, while just under a third (32 per cent) said they were more likely to use it to develop an existing member of staff.
Keith Richards, chief executive of the PFS, promised that they will be publishing a practical guide to help advisers access government funding and take on an apprentice.
“The PFS is sponsoring the development of this new financial adviser apprenticeship, complementing the recently-launched, government-supported financial services administrator and paraplanner apprenticeship schemes,” he stated.
“The new scheme will augment a comprehensive range of staff development opportunities for financial advice businesses, making it easier for them to develop new talent, support their client proposition and facilitate business growth.”
The apprenticeship is due to go live in mid-to-late summer, following approval from the Department for Business Innovation and Skills.
The Society of Mortgage Professionals’ head of professional development Lee Travis also backed the apprenticeship scheme, pointing out there is already a ‘trailblazer’ initiative running, which supports employers looking to train up mortgage advisers.
This scheme lasts between 12 and 15 months, has no age limit for apprentices and comes with government funding for employers with less than 50 staff, or for taking on an apprentice under the age of 19.
Mr Jenkins confirmed there are trailblazer apprenticeship training schemes at qualification level three for financial services administrators and mortgage advisers, with a level four scheme for paraplanners.
He mentioned that a level four financial adviser scheme is also under discussion with employers.
Islay Robinson, chief executive at Mayfair-based broker Enness Private Clients, complained that the lack of “decent” broker recruits in the industry is a real problem.
“We have a programme of bringing people in and training them up, but once we do, some of the larger corporate firms are willing to pay higher salaries and they often get poached.
“Many firms aren’t training because it costs so much to train staff - approximately £45,000 per annum - when you factor in salary, Cemap qualification, internal training and commission, and it takes around 18 months for a business to recoup that figure,” he argued.
peter.walker@ft.com
