Banks to the rescue?

The latest information suggests that the current Independent Financial Adviser (IFA) has an average age in the fifties and the advent of the Retail Distribution Review (RDR) is estimated to reduce the adviser population by anything between 20% and 50%. Putting these two factors together, it is highly likely that the overall IFA numbers will be reducing substantially, unless there is a steady influx of new blood.

Where will the next generation of IFA’s come from?

A large number of the current populace entered the profession via one of the big salaried salesforces (i.e. Prudential, Pearl, Co-op Insurance etc). They enjoyed a great grounding in the ways of providing sound advice to their clientele and later moved into the independent arena. These large salesforces, generally, no longer exist. They were deemed by the companies to have become an outmoded and expensive method by which to distribute their wares. Therefore, by default, the traditional training ground for “wannabe” advisers has disappeared.

The cost of Financial Services regulation

One effect of (much needed) regulation has been an escalation in costs for the companies operating in the Financial Services sphere. A further “knock on” of the  increased costs is that few of the smaller firms are able to afford taking on a new adviser, who then needs a large degree of supervision and training before making any significant contribution to that firm’s bottom line profit. Consequently, the movement within the adviser population has been mainly of the experienced personnel changing from one employer to another and not, as is really vital, the arrival of “newbies”.

The banks to the rescue

Just about the only players in the market, who have deep enough pockets to take on trainees, are the banks and they did not seem willing to accept that mantle – until recently!

I have made comments on this before,

“Interestingly, the banks also appear to be addressing the issue of new entrants to the Financial Services ranks. There has been a marked increase in the number of potential positions for individuals wishing to become a financial adviser – some are prepared to take on individuals who have yet to pass the requisite examinations, train them initially through the mortgage advice requirements and move them into a position of Mortgage Adviser. The career path is designed to progress the adviser onto becoming a fully fledged Financial Adviser over time.”

The political agenda

This government, and previous encumbents of Number 10, have expressed the desire for the public to take more personal responsibility for pensions, savings, healthcare etc etc. – the State cannot continue to provide “cradle to grave” benefits at current levels as the overall population increases by it’s own longevity. The public, generally, do not instinctively think about these issues of their own volition. Therefore, there needs to be a sufficient body of advisers to carry the message out there and provide the advice, which may prompt more folk to accept responsibility on behalf of themselves and their families.

More Financial Advisers required

The ranks of the Financial Adviser (independent or otherwise) need real replenishment – the banks seem to be making good moves in that direction.

This blog post was brought to you by David Shirley of David Shirley Associates Ltd. The Financial Services Recruitment specialists helping you with Independent Financial Adviser Jobs, Financial Adviser Jobs and other Financial Services Jobs.