The phrase ‘when I grow up, I want to be a financial adviser,’ is unlikely to be reaching the ears of teachers and parents any time soon. This is not intended to pour scorn on the advice industry, but does speak to one of several problems facing it in the quest to bring in fresh faces.
“We [the industry] have done a dreadful job of communicating how special this career can be to young people – who come out of school wanting to be vets or lawyers and not so much financial advisers. I think that’s a tragedy,” says Nick Turner, president of the Personal Finance Society (PFS). “Enabling large swathes of the community to achieve their life goals is equally as important as those other professions.”
It is becoming a pressing problem. Though exact statistics are not available, the average age of a financial adviser is thought to be in excess of 55. Some advice outfits have either slimmed down or folded as a result of the significant regulatory changes of recent years, meaning more advisers are taking retirement. The industry may be able to cope with this for now, but a stream of younger replacements is not on hand to fill any vacancies that may spring up.
“There isn’t a clear route into the industry any more, with the decline in direct sales forces and sales consultants for life offices,” adds Adrian Murphy, managing director of Murphy Wealth.
“Also, given the highly regulated nature of the industry and the bad press it has received over the years, it is no surprise that there isn’t a rush to be involved,” he adds.
Rough with the smooth
The turn of the year brought mixed news on this front. A positive note was struck by 18-year-old Elliot Guthrie, who set his sights on the profession last year while working as an administrator for a large IFA. Impressively, Mr Guthrie is studying for the CII Level 4 diploma in financial planning at the same time as reading economics and marketing at Strathclyde University. His current firm, for which he works part time, is providing support and he hopes to secure a role on completion of both studies.
“I find the idea of helping clients achieve what they want in life, by helping them make the most of their money, quite rewarding,” he says.
Mr Guthrie acknowledges that opportunities to break into the industry, such as apprenticeship schemes, are still rare and there are signs that interest is even more limited than some thought.
In February, The University of South Wales was forced to pull down the shutters on its Level 4 FCA-accredited financial planning course, citing a lack of demand, despite only 15 students being required in order for the classes to continue.
The relative lack of younger advisers also flies in the face of regulatory demands, according to Ian Balgarnie, business development director at Ascot Lloyd. He says: “The FCA has made it very clear that advice firms should have a sustainable business model. You’re not going to have a sustainable business model when the majority of the workforce is over 55.”