Most financial advisers are concerned about attracting fresh talent to the industry and the impact this will have on consumers’ access to advice, according to research by Panacea Adviser.
The survey of 104 advisers revealed seven out of 10 find it difficult to hire new advisers as well as entry level recruits to their business, while only 6 per cent felt this was not an issue.
Derek Bradley, chief executive of Panacea Adviser, said: “In my opinion there is a clear link between the impending recruitment crisis in financial advice and the Retail Distribution Review.
“We’re all familiar with the fact that many customers can no longer afford or want to pay for advice following the RDR, which in turn means advisers have a smaller – albeit wealthier – pool of customers.
“This diminished customer base will ultimately hinder the growth prospects for advice firms going forward, which naturally makes recruitment harder.
“The risk here is that, eventually, there may not even be enough advisers left to cater for those customers who can still afford advice."
Mr Bradley said attracting new advisers to the industry is only the start.
A number of survey respondents also highlighted that after investing in both recruitment and training for new advisers, many leave the industry shortly afterwards having been tempted by opportunities elsewhere.
“So, it’s clear that both individual businesses and the adviser community as a whole need to think about how best to make financial advice an attractive long-term career prospect,” he said.
Just under 70 per cent of advisers also said they had not hired any new recruits from outside the industry to the role of either financial adviser or paraplanner in the past two years.
When asked why recruitment had become such a challenge, some respondents acknowledged it was proving difficult to match the salary expectations and career aspirations of graduates.
Advisers also pointed to the cost and time implications involved with both recruitment and ongoing training to keep new advisers up to speed with increasingly complex compliance and regulation.
These current issues around recruitment are causing advisers to become concerned about the future too, with 87 per cent arguing that the lack of new advisers could pose a threat to consumers.
Dwindling numbers of advisers in the future could, according to the respondents, push up the cost of advice and therefore diminish access, as the smaller pool of advisers is be forced to be more selective about accepting clients.