IFAMar 29 2017

Finding the next generation of financial advisers

  • Grasp the recruitment challenges faced by advice firms
  • Learn about how firms are looking to attract younger advisers
  • Gain an understanding of the opportunities for young people to break into advice
  • Grasp the recruitment challenges faced by advice firms
  • Learn about how firms are looking to attract younger advisers
  • Gain an understanding of the opportunities for young people to break into advice
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CPD
Approx.30min
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CPD
Approx.30min
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CPD
Approx.30min
Finding the next generation of financial advisers

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.”

 

The long and winding road

Starting a career in advice is no easy task. The RDR raised the minimum qualification requirements for advisers, a move designed to increase professionalism in an industry that had suffered severe reputational damage in previous years. Better qualified advisers have been one of the regulation’s real success stories, but the bar has been raised nonetheless.

Prior to its implementation, the minimum adviser qualification threshold was set at Level 3 – equivalent to A-Level standard – which could be obtained via the Financial Planning Certificate (FPC) or Certificate for Financial Advisers (CeFA). These qualifications were not particularly challenging, and therefore becoming a fully qualified financial adviser within six months was feasible. The move to Level 4, in line with the first year of a degree, recognised that adviser requirements stretched well beyond these qualifications. The impact of this was two-fold: additional study for a large proportion of advisers, and a longer and more expensive route for those entering the industry. Firms were forced to tread more carefully when recruiting unqualified advisers, given the additional cost and resources required. 

The qualification demands on individuals and firms have become even greater when considering the fact that chartered status is now not only desirable but is seen as the gold-stamp of professionalism. However, with the correct attitude, none of these requirements should be difficult obstacles to overcome.

 “This isn’t just gong collecting,” Mr Turner says of the importance for advisers to achieve chartered status. “It demonstrates a whole range of things – one of which is commitment to the industry and secondly, a hunger to understand broader issues.”

 

The hunt for good advisers

The drop in adviser numbers post-RDR was sharp. Many older advisers, understandably, sought early retirement rather than be faced with additional exams in order to meet the minimum qualification criteria. In addition to this, several large banks withdrew from the advice market, partly because of substantial fines and reputational damage, but also a recognition that the new regulatory regime made their business models unsustainable.

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