But banks’ size and resources meant that, for better for worse, they often presented the best route into the industry. Their departure has further limited the opportunities for budding advisers.
Table 1, taken from The Association of Professional Financial Advisers (Apfa) report ‘The Financial adviser market: In numbers,’ highlights the fall in numbers.
Between 2009 and 2013 adviser numbers dropped more than 18 per cent, as advisers and firms felt the pinch of the RDR. This is also reflected in the number of advisers per firm, the average dropping from 5.12 in 2011 to 4.4 in 2013.
Trevor King, head of financial services distribution at NFU Mutual, says the shrinking of the adviser market following RDR was even harsher than expected, making a lack of new talent even more noticeable.
“One of our top advisers retired about two years ago and it took us eight months to find a replacement. It is getting tougher and tougher to find good quality advisers,” he says.
Grow your own
As a result of this dilemma, firms struggling to recruit advisers have decided to take qualification matters into their own hands. Adviser academies are not revolutionary, but have run under the radar in recent years. St. James’s Place has run an advice academy for some time, but Sesame Bankhall sold its Financial Adviser School business at the start of last year. The school was purchased by Intrinsic, the advice arm of Old Mutual Wealth, and this commitment has been followed in 2017 by more firms taking the plunge to attract a new breed of advisers.
Both IFA Ascot Lloyd and restricted advice firm NFU Mutual launched academies of their own in the opening months of the year, keen to attract a younger cohort of advisers. Ascot Lloyd’s programme closed for applications back in February and Mr Balgarnie describes the response as “overwhelming”, having received nearly 100 CVs.
The trainee regime has been carefully constructed. From inception to becoming a fully-fledged adviser should take three to four years. Mr Balgarnie explains that the first two years will focus on administration and paraplanning, with students then eased into the application of advice. He says: “Assuming they’ve come through the first two stages and passed all of the requirements, they will then become a trainee adviser and move to Ascot Lloyd Direct – a telephone based-service offering to clients who have smaller portfolios. At that point they will hone their interpersonal, influencing, negotiation skills.”
NFU Mutual’s academy will follow a similar structure, with six trainees initially focusing on simple protection products after completion of the diploma and initial training.
