Where will the next generation of financial planners come from?
Exchange Street Financial Services Director Andy Taylor muses on where the next generation of financial planners will come from.
We are often approached by eager individuals who are keen to pursue a career in financial advice who wonder whether we have any opportunities we can put their way. The answer, sadly, is no, and nor do we often have anything more positive to say. From looking at the average age of advisers and where they start out, it is clear to see why.
At one stage, direct sales and then retail banking led the way, providing the relevant support and structure for inexperienced individuals to take their qualifications and get valuable on the job training. With their demise it is understandable why New Model Adviser recently suggested that the profession could ‘sleepwalk into oblivion’ if the industry fails to put in place a system that enables young talent to enter the industry.
Over a third of advisers are thought to have moved into financial planning having initially started with a tied sales force, whilst around 10% come from banking backgrounds. That is approaching half of current advisers and paints a worrying picture of the future, particularly in the context of closures of adviser training programmes such as Sesame Bankhall’s Financial Adviser School.
Blame for this lack of planning is due to a mixture of cost, time and the level of commitment needed to ensure that each company has a successful outcome. Given the demands of implementing the Retail Distribution Review, increased regulation and a difficult economic climate, it is understandable that many financial planning firms, most of which are reasonably small, have focused on more short-term objectives.
However long-term planning is urgently needed. Figures relating to the average age of advisers have long demonstrated that the majority of advisers are over 40 with one recent survey even suggesting that 38% of firms had no staff aged under 30. Without a concerted industry wide plan of action it is clear that in the not too distant future demand for financial planning will far outweigh the number of suitably qualified and experienced individuals capable of carrying it out.
For advice on how to progress from sales support, through paraplanning, to advice, please contact us on 0161 973 6900.