Finding the right staff post-Retail Distribution Review

Given this dichotomy, how are advisers supposed to hire the most appropriate additions to their teams? Where will these bold new advisers come from to meet the demand for advice?

According to Derek Bradley, founder of online advisory forum Panacea Adviser, the fact the RDR has created a “smaller talent pool” from which advice businesses can attract future employees, means business owners have had to think harder and longer about how to go about hiring.

He says: “Crucially, this issue has also prompted many to question where and how the industry will be able to attract the next generation of advisers.

“Recent developments including the news around the Panama Papers may put people off pursuing a career in financial services while the potential threat of robo-advisers replacing human face-to-face advice will make it hard for many to see a future in the industry.”

As we continue to move from an industry to a profession, there is greater demand for certain roles to support this professionalism, especially paraplanners Martin Bamford

The Panama Papers were 11.5 million leaked documents that detail financial and attorney–client information for more than 214,488 offshore entities.

The leaked documents were created by Panamanian law firm and corporate service provider Mossack Fonseca.

Some of the documents dated back to the 1970s.

However, he provides some practical steps to help make things a little easier.

Key pointers, according to Mr Bradley are:

■ Job description: Spending time creating the job description is key.

■ Character and culture: Give a feel for the personality of the business.

■ Attract: Highlight employee benefits which are likely to attract someone to the role.

■ Plan: Setting out a recruitment plan can also keep the hiring process and timeline on track.

■ Weighted scoring: Creating a simple matrix document with weighted scoring is another useful tool to aid the decision making process, and this also encourages fairness.

However, while the size of the talent pool may have shrunk, not all advisers believe the quality of those candidates swimming in it has changed that much since RDR.

Some believe it was always challenging to find the right person for a particular role at a financial advice firm.

Martin Bamford, chartered financial planner for Informed Choice, comments: “Finding the right staff is always a challenge, although I’m not sure the RDR necessarily changed the employment market for financial planning firms.”

However, he agrees RDR’s focus on qualifications and higher service standards has caused a shortage of good paraplanners and other financial advice roles that would drive the change from an industry to a profession.

Mr Bamford adds: “As we continue to move from an industry to a profession, there is certainly greater demand for certain roles to support this professionalism, especially paraplanners, who are in short supply.”

Due Diligence

This is especially important, given the increased onus now on financial services firms to root out the so-called “rolling bad apples”.

This has come into force with new requirements brought in on 7 September as part of the senior manager’s regime (SMR).

The SMR, from the Financial Conduct Authority and the Prudential Regulation Authority, states firms will have to ask former employers for regulatory references about the employee going back six years.

According to Arpita Dutt, partner at Brahams Dutt Badrick French LLP: “This will apply where the candidate is applying for a role which is a senior financial services or insurance management function, an FCA controlled function, a key function, and for certain non-executive director roles.

“It may also apply where the move is internal, for example on a promotion to one of these types of role.”

John Joe McGinley says this is why due diligence is so important ahead of the all-important phone call to offer a candidate the job.

He explains: “Referrals are always best. Some hiring firms might speak to strategic alliances they share with the candidate, or even clients they may know.

“We are a people business and I always urge a firm to ask people they know about potential recruits.”