Financial advisers are worried they will not be able to attract the fresh job talent to the industry and the impact this will have on consumers’ access to advice.
So says new research from Panacea Adviser.
Their survey revealed that seven out of ten respondents are finding it difficult to hire new advisers and other entry level recruits to their business, while only 6% felt this was not an issue for their firm and 25% were unsure.
What’s more, nearly 70% of advisers also said they have not hired any new recruits from outside the industry to the role of either financial adviser, or paraplanner in the past two years.
And the reason why recruitment had become such a challenge, is that its currently 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.
The survey concludes that these current issues around recruitment are causing advisers to become concerned about the future too, with 87% arguing that the lack of new advisers could pose a threat to consumers. Dwindling numbers of advisers in the future could, according to survey respondents, push up the cost of advice and therefore diminish access, as this smaller pool of advisers will be forced to be more selective about accepting clients.
Panacea Adviser Chief Executive Derek Bradley said: “In my opinion there is a clear link between the impending recruitment crisis in financial advice and the RDR. 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.
“And Attracting new advisers to the industry is only the start. A number of our 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.”