How academies are alleviating the advice market crisis

The result is likely to be that the overall number of advice companies will fall, while the average age of advisers continues to rise, with many not eager to take on new clients.  

At the same time, the demand for advice, and need for advisers, has not diminished. 

Into this breach have stepped a range of businesses operating adviser academies, with the aim of training people to CII level four standard or higher. 

Julian Hince, head of the Quilter Financial Adviser School, says the reason for the acute shortage of younger advisers coming through “is that the traditional routes which brought through the next generation – the High Street banks and the insurance companies – are not available any more. Even 25 years ago, those companies had perhaps a quarter of a million advisers”.

Helen Grieves' route to teaching at an adviser school is very different from that of many others in the industry. 

Grieves' brother-in-law runs an advice business in Newcastle. They discussed the state of the industry, the difficulty of attracting new advisers to the industry, and the lack of diversity among advisers. 

A maths teacher by profession, Grieves, along with her friend and fellow maths teacher Shannon Fox, decided to take the relevant exams and set up the Lowes Financial Academy with Grieves' brother-in-law Ian Lowes, an adviser who runs Lowes Financial Management in Newcastle.  

The truth is that a lot of people in the North East don’t know what a financial adviser is, they think it is people trying to rob you, and we want to help with building up understanding.--Helen Grieves

What next?

While the academies may sound like a good idea for training people, the question is: what happens when they are qualified?

At Quilter, which bought the adviser school from Sesame five years ago, the intention is for almost all of the students at the Quilter academy to become employed by that company.

This policy is pursued by other academies. A small number of the students in the academy have self-funded their studies, and will not necessarily become employed by Quilter.

One way they recruit for the academy is by contacting the advice companies within the Quilter network to enquire if they have staff who want to attain qualifications; these staff then return to the company within the Quilter network that employs them.

At Lowes, the focus is less about hiring graduates for the advice business than about providing skills to locals in the North East of England.

Grieves says: “Improving access to the industry is an important focus. We want to break down barriers. The truth is that a lot of people in the North East don’t know what a financial adviser is, they think it is people trying to rob you, and we want to help with building up understanding.

"The people who come through the academy range from a 74-year-old retired person who wants to know about managing their own money, to people who have overseas qualifications but want to work here, as well as people who have been in the industry in admin roles and now want to get qualified.” 

Hince says Quilter has a “mixture of graduates and career changers” among their intake, with a particular focus on “athletes and former military personnel who need to do something different now".

He adds: "Being a financial adviser is not seen as an obvious career choice for many, and what we are finding is that the people who come to the academy are not people who did an obvious degree for a financial services job.”

He says the average age of an adviser in the school is 31. 

Marietta Connery is people director at Schroders Personal Wealth, which has around 20 trainees at any one time. 

She says that the programme at the SPW academy is divided into two. Those advisers who pass the exams then spend “the next part of the programme being supported by our development team and mentored by senior advisers to work towards becoming competent advisers. They will be supported by SPW to continue their professional development and progress towards chartered financial planner status”. They then join the SPW business. 

Remote learning

A major challenge for all academy providers has been the advent of lockdowns and the need to move classes to remote learning, which has created fresh challenges for both staff and students.

As a former teacher, Lowes' Fox is experienced in face-to-face teaching, but the experience of working remotely is a new one. She says teaching the information as contained in the textbooks is fine to do remotely, but that the “soft skills” aspect of the course is better taught in a classroom. 

The traditional routes which brought through the next generation – the High Street banks and the insurance companies – are not available any more.--Julian Hince

Both Fox and Grieves passed the exams while combining learning with working full-time, and say that if they had been able to learn in the structured way via an academy it would have been beneficial, as they could have focused exclusively on their studies, which they completed before setting up the academy. 

Connery says SPW has been able to adapt the way the courses are run during the pandemic and has always used a mixture of classroom learning and students learning in their own time. 

She says: “At the start of the pandemic we reviewed our academy, which in ‘normal’ times contains a mix of self-study and classroom-based activity. During this period we were able to adapt from classroom-based learning to online learning without having to miss a day of the academy.”

Hince says Quilter’s programme for students at the level four stage has moved entirely online, “and this was the direction of travel anyway, even prior to the pandemic, while the level six classes will be a hybrid model going forward.”   

He says there is significant demand from students to do more online work, as they enjoy the flexibility.  

Lowes Financial Academy presently only offers the level four qualification, but the teachers intend to take the level six exams soon and subsequently teach that as well. 

Hince says demand is strong among those students at Quilter who have passed the level 4 exam to continue on and take level six, while at the SPW academy, the ultimate aim is to guide the bulk of students to chartered status.

David Thorpe is special projects editor at FTAdviser