When we are looking to recruit future advisers, we are looking for a different set of skills to the ones we have currently.
Financial advice didn’t exist as a profession 80 years ago and since its inception it has been constantly evolving.
When I started 20 years ago, we thought that we could pick the best funds for clients, and this was how we could add value. We were proved wrong and started focusing on tax mitigation as the value-add.
But now tax planning is increasingly being automated by platform software. The pivot then was to cash flow planning, which is still a big focus for us.
But as with tax planning, this is simply about accurate data entry and rules-based interpretation, and as such artificial intelligence is likely to replace this latest ‘adviser alpha’ in time.
This means that the future financial adviser is going to have to focus on the softer coaching skills that, for now, AI can’t replicate.
There is a growing pool of coaching talent coming up through the ranks that may well provide a steady supply of future advisers.When looking for the next generation of adviser candidates, we are on the lookout for individuals whose presentation and interpersonal skills are second to none.
If they are to have a long career as advisers, they are going to need to be able to coach clients out of bad financial behaviours into good ones, and to present a client’s future planning in a clear and engaging way.
In addition, as advice gets commoditised for clients with smaller portfolios, advisers will have to migrate to wealthier clients who are still willing to pay extra for human interaction.
The UK’s advice gap is likely to be met by cheaper, more remote advice services such as those offered by Vanguard and Octopus and not by more traditional advice firms.
Newer, younger advisers often find it hard to establish credibility quickly with wealthy and complex clients, so we are also looking for mature, self-confident candidates.
On the other hand there is a growing pool of coaching talent coming up through the ranks of these two firms that may well provide a steady supply of future advisers.
The quid pro quo when recruiting these individuals is that we need to offer ongoing training and support in these soft skills.
Work patterns also need to be more flexible as geography starts to matter less. If clients can be onboarded from anywhere in the UK, so can future staff.
But, as the pandemic taught us, all remote relationships can be hard on both parties and so new skills are needed when managing staff remotely.
This is not something that we have finessed yet and external coaching for us as business owners is going to be an ongoing need.
Dunbar’s number dictates that you can only have a relationship with 150 people.These future advisers will be able to look after more clients than is currently the average for advisers, as software improvements should make advising more efficient (I am looking at you; platform CEO).
Being able to look after more clients might not be the best approach to take though. If you are engaged in deep, financial coaching/wellbeing then you can’t put in this amount of time, energy and emotion into large numbers of people.
In fact, Dunbar’s number dictates that you can only have a relationship with 150 people (and advisers need to deduct the number of family and friends from this total).
This works if the future adviser is looking after wealthy, complex individuals and charging a good level of retainer fee for doing so. The mass market clients on the other hand may be left to the robots.
Matt Pitcher is managing partner at Altor Wealth Management
