Your IndustryAug 13 2021

Bigger advice firms slower to recruit post-pandemic

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Bigger advice firms slower to recruit post-pandemic

Some of the bigger advice firms have been slower to move when it comes to recruitment in a post-Covid environment, according to IFA recruiters.

During the pandemic many UK advice firms saw a decline in profitability through 2020 and a large number of firms implemented recruitment freezes - or making redundancies.

Data published last year by Fundsnetwork, which polled 100 advisers, found 36 per cent of advice firms had furloughed employees and 10 per cent had issued a hiring freeze in a bid to trim spending.

However, despite these difficult circumstances, Paul Harper, managing director of Paul Harper Search & Selection, said his firm has seen smaller firms act quicker in their recovery while bigger firms have lagged behind.

“With bigger firms, it's a bit of a mixed picture,” he said. “Larger firms have been slower to react as many were downsizing initially as the market turned. They have authorised replacements but are only just starting to recruit to higher volumes.

“The competition means financial advisers can expect to receive regular calls from headhunters.”

He said the larger firms are famously slow to move so when the pandemic hit, many didn’t act quickly.  

“On the one hand, some really big firms have been cutting back for a while and they continued that through the pandemic,” he said.

“Smaller firms have responded more quickly to the up-turn. They have said that markets have changed and so we can too. They are ready to grow and are quite anxious to grow. There are also a lot of consolidators coming in buying businesses who are also anxious to grow because they have got money.”

FTAdviser spoke with other recruiters in the IFA market, who echoed this perspective.

Lewis Byford, co-founder of Antony George Recruitment agreed as he gave the example of one adviser his firm placed last year who left with £25m funds under management and he joined another small IFA. 

“Bigger firms made some big changes even getting rid of their high performing advisers and letting them take their clients with them,” he said. 

“What we noticed was that the firms that rely on new business to cover the cost of the staff performed less, for example larger businesses, where the small firms use ongoing adviser fees to cover the cost of staff and new business as a bonus. So when the market bounced back they were less affected.”

He said at his firm, he has seen people joining smaller firms, specifically 50 employee businesses and less, which this year “are growing like crazy”.