Your IndustryMar 26 2020

Finding talent for your business

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Finding talent for your business

According to Scott Stevens director of recruitment and acquisitions at Quilter, there is a lot of demand for IFAs, but not many advisers are willing to move from between firms if the job offer is not attractive enough.

Mr Stevens lists seven factors that can make a hiring firm more attractive to an adviser.

The firm needs to offer paraplanning support, who can do administrative tasks and take some of the burden away from the Ifa.

Other advisers are looking for lead source generation; where a firm can provide a steady stream of warm leads or a book of business.

If someone approached me in a way that showed they understood our business and why they would be a good fit, I would always speak with them Chris Budd, Ovation Finance

Advisers are also looking for firms with robust back office technology

A lot of positions offered are for self-employed roles, but most of the demand is from individuals looking for salaried positions

Mr Stevens says: “The more aggressive principals recognise that if they want to inject value into their firm, they need more salaried advisers.

“The clients will belong to the business, therefore the valuation is a lot higher. If you have a loose collection of self-employed people, those clients belong to the advisers who can up sticks and go, so what value do you have?”

Job candidates also want career and personal support, so that they feel they are being developed. This can be in the form of mentoring.

They are also looking at the working environment and how attractive it would be to work there.

Mr Stevens adds that as a result of the ageing profile of financial advisers, practice buyouts are also attractive options.

To find candidates, the vast majority of firms will be looking through referrals and meeting advisers at industry events, although the coronavirus crisis has put a stop to some of that for the time being.

While recruitment consultants are another option, for a small firm they can be expensive.

For example, they might charge anything from 15 per cent to 20 per cent of the agreed salary, as their fee; figures derived from Quilter's dealings with recruitment firms over the last year.

When you consider the average salary of an experienced financial adviser, according to figures provided by Quilter, this could be quite costly for smaller firms.

For experienced advisers, the average salary in Scotland is close to £59,500; in the North of England it is £58,600; in the Midlands it is £50,600, in London it is £66,500, while in the South it is close to £54,000.

“If you are not willing to offer that and you have not got all the other things I mentioned that would attract a candidate, it is really tough,” Mr Stevens adds.

And using a recruitment consultant does not guarantee a quality candidate.

Chris Budd founder and chairman of Ovation Finance adds: “Too many people use recruitment agencies. It’s easy to give your CV to a recruiter then sit back and wait. Most owners/MDs will welcome a direct approach if it has been well researched and thought through. 

“If someone approached me in a way that showed they understood our business and why they would be a good fit, I would always speak with them, even if we weren’t looking to hire at that point.”

When an adviser joins a firm, the same factors that attracted him are likely to be the same that will keep them in the company.

According to a study by Quilter, the three top reasons why people tend to leave firms are because:

The firm is not providing any business support

What was promised on the way into the job has not been delivered

The individual got a better offer elsewhere

Mr Budd says firms should also ask themselves if their clients see their relationship with the advisers at the firm or with the business

“If the former, then when the adviser leaves, so does the client,” Mr Budd adds. 

“This adviser might be an employee or the owner, but either way, this significantly affects the value of the business and the likelihood of it continuing beyond the owner. 

“Businesses therefore need to work on the client seeing their relationship as being with the firm.” 

Another way for firms to grow and expand is by succession planning.

Principal owners of an income or lifestyle business - taking out the profit each year -  might not worry too much about succession planning.

However, a growth business is one that has a real value as an ongoing concern once the owner has left – and therefore a value.

“Trouble is, lots of people are income businesses, yet still think that it has a value – that someone is going to buy their business from them one day,” Mr Budd says. 

“If you want the business to outlast you, then you need to work on making yourself the least important person in the business. This can take many years and needs a plan to follow – it won’t come about without serious effort.

“Many think that someone is waiting to buy their business at a high value. This is so often not the case.”

If the owners are crucial to the business, then the clients might not stay with the acquirer, which means the value offered will not materialise

Mr Budd adds: “I speak with many, many owners, and few are taking practical steps for their own exit.

"It takes time – years – and most do nothing until the time comes when they want to sell, at which point they discover they don’t have many options.”

As the rate of principals reaching retirement age outpaces the rate of talent coming into the market, firms will have to get even more creative to win over candidates.