IFAJan 16 2019

Heath vies for £240m to train next generation of advisers

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Heath vies for £240m to train next generation of advisers

The director of an adviser trade association is hoping to tap into a £240m fund to train the next generation of financial advisers, claiming this reserve is currently "unused and wasted". 

Garry Heath, director general of trade body Libertatum, published the Heath Report Three yesterday (January 15) in which he announced the launch of an adviser training project, Adviser Train, intended to boost recruitment in the industry. 

Mr Heath claims there is an untouched fund within the government's apprenticeship scheme for financial services that should be used to ensure smaller advisory businesses can afford the cost of training new recruits. 

He said: "Every firm with a wages bill in excess of £3m has, since April 2017, paid 0.5 per cent of their salary bill into the government's apprenticeship scheme.

"These funds can be reclaimed if the firm starts training "apprentices" - but after two years, if the firm has not reclaimed the money it is ceded to the Treasury."

In last year's Autumn Budget, the government cut the amount small businesses - which would include many advice firms - would have to pay towards an apprenticeship from next April.

Firms which are too small to pay the government's apprenticeship levy, currently have their apprenticeships funded under "co-investment", where they pay 10 per cent towards the cost of the apprenticeship and the government pays the rest up to the maximum funding band, which in the case of financial advice and paraplanning is £9,000.

But October's Budget cut this to 5 per cent, meaning many advice firms would only have to pay £450 towards funding an apprenticeship.

Mr Heath added: "In terms of financial services, the Financial Skill Council informs us that over £300m per year is collected towards the government's apprenticeship scheme and only 20 per cent is being used for training. 

"So £240m is currently unused and, therefore, wasted." 

Mr Heath said he intends for Adviser Train to be the body which administers this funding and oversees both the recruitment and employment of trainees in the industry. 

Mr Heath's report stated Adviser Train will aim to recruit and retain 5,000 advisers each year, anticipating the cost per adviser to be £30,000 spread over 24 to 30 months. 

The Adviser Train project is expected to begin as a registered group trading association (GTA) with the possibility of creating a subsidiary apprentice training association (ATA) and will complete certain functions in-house with others subcontracted externally. 

Keith Richards, chief executive of the Personal Finance Society, said: "The Personal Finance Society (PFS) was the first to launch an apprenticeship training programme, called PFS Aspire, back in early 2017 and over 300 advice firms signed up in the first week it was announced. 

"The programme leverages the funding available through the Apprenticeship Levy which pays for training and qualifications of individuals who aspire to be the next generation of financial planners." 

Mr Richards added: "The PFS works in collaboration with key training partners who are able to access funding, and I am delighted to learn that there are other training organisations interested in increasing capacity across the sector.

"There is both a need and an appetite for succession and the attraction of new talent to meet increasing consumer demand for financial advice."

rachel.addison@ft.com