Fresh faces versus experience

There are virtues to both - and downsides.

For example, the experienced adviser may possibly have a back book of clients - but often restrictive covenants may mean he or she is unable to bring them into the firm for six or even 12 months.

Furthermore, they may have experience - but is it the right experience? What bad habits may have been formed during the years of their past employment?

While they may be able to hit the ground running and bring money into your firm for week one, they will also be more expensive to hire.

A young trainee, on the other hand, is less expensive - and won’t have any bad working habits because you can train them in your own mould.

But it could take years for them to become profitable members of your firm, bringing in new client business.

I believe Facebook is a personal medium and should be respected as such - but then again it is human nature to peek, so beware what you post John Joe McGinley

Martin Bamford, chartered financial planner for Informed Choice, says: “It can be difficult to integrate trainee roles until you reach a critical mass with your business, as you need to make a long-term investment in people and accept that not all will stay with you for the entire journey.”

According to John Joe McGinley, founder of Glassagh Consulting, it is not so much the size of the business but the long-term goals of the business which should determine whether you should hire a trainee or buy in an experienced financial adviser.

He says: “It depends on the business plan of the practice and the desire of the owners.

“Many want to mould a successor so a younger adviser is required. However, as segmentation and planning become widespread, many firms see the existing potential that can be developed now, and require someone who can give an immediate impact for the firm.

Mr Bamford adds: “I would argue there is a role for both approaches.

“Within our firm, we have a healthy mix of experienced individuals and trainees, who each bring different qualities and make different contributions to our business success.

“There is a balance to be found; getting value from a trainee paraplanner or adviser from day one, and developing their skills and experience for the future.”

Training academies

There are very few training grounds for those looking to enter the industry.

Sesame Bankhall Group’s Financial Adviser School (FAS) was bought by Old Mutual Wealth in February 2016 and operates it on a not-for-profit basis.

Old Mutual Wealth has said its Financial Adviser School could grow to focus on all aspects of the industry, including administration.

Richard Freeman, chief distribution officer of Old Mutual Wealth, said: “I have been in distribution for 20-odd years. At all the firms I have ever been in we have wanted some sort of academy to bring in new blood. This (buying the Financial Adviser School off Sesame) was a great opportunity.”

Sister newspaper Financial Adviser featured a string of individuals in 2013 and 2014 who had used the Financial Adviser School as a springboard into becoming trained up and getting a placement in a financial advisory firm.

For example, biomedical science graduate Nasima Ali moved from pharmaceuticals when she graduated in 2009 to becoming a financial adviser through FAS, while banking veteran Richard Smith, joined the FAS after working in a branch for 20 years to retrain as a financial adviser.

Mr McGinley says: “A question I get asked every time by advisers when I am doing a business audit is ‘how can I get fresh blood?’

“I am a great believer in growing your own people and I would advise firms to have a look at the St James’s Place Academy, which I believe is a great initiative.

“It’s a throwback to the old provider-led training days.”

Apprenticeships

Professional bodies representing the advice sector are also hopeful that 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.

Snooper’s charter

As an aside, before bringing candidates in for interviews, whether they are fresh-faced graduates or school leavers keen on doing an apprenticeship, or old hands used to working in the financial advice industry, some of the recruitments experts FTAdviser spoke to say it is helpful to monitor their social media activity.

Not only can this help you to ascertain the character of a person, or cast a spotlight on any potential fabrications in a CV, but it can also give you an idea of how well they will fit into the team as a member.

Mr Bamford says: “When we invite a new person into our business, we take a number of measures to ensure they are right for us.

“Given the role every employee plays as an ambassador of our business, I do not think it is going too far to review their social media and online presence as part of the hiring process.

“I have certainly rejected candidates in the past who looked very good on paper but presented a terrible online image, for example, making crude or offensive remarks on Twitter.

“If you show poor judgement on social networks, there is a good chance you will act like this as an employee.”

Barclays Bank’s recent TV advertising campaign showcased young people talking about their first email address, highlighting how too much ‘banter’ could send the wrong impression to potential employers.

Its LifeSkills website aims to help young people learn about making themselves professional and appealing to employers - and it also offers ideas for businesses thinking of taking on young staff and training them up or offering them work experience and internships.

It is worth caveating that young people’s lifestyle and therefore use of social media to reflect it tends often to be very different to an older person’s - and you cannot always judge the calibre of a candidate by the old Facebook pictures of them wearing a gorilla costume and sitting outside Jack Fulton’s Frozen Food Emporium in a shopping trolley, purely as an example.

As Mr McGinley comments: “Social media is here to stay and our lives are now online. I believe Facebook is a personal medium and should be respected as such - but then again it is human nature to peek, so beware what you post.”