Creating a strong and resourceful advice sector that is fit to face the future is high on PIMFA’s CEO Liz Field’s agenda. Here she explains just some of the initiatives which are underway in order to ensure that the sector can successfully meet the evolving needs of next-generation clients
Financial services has been a leading light for centuries when it comes to investment and helping individual plans for their financial futures, but as with many initially ground breaking industries, if it doesn’t continue to evolve and innovate it can be in danger of being left behind. PIMFA and our members are very conscious of and its one of the reasons ‘developing a sector for the future’ is one of our key manifesto pillars.
Future proofing in action
We see that future proofing happening in in terms of regulation, supervision, technology, disruptive and innovate thinking and in a myriad of other areas – but first and foremost it must start with our people. As our society changes, we need to reflect that in our hiring practices and the workforce we create to best serve the needs of that society.
We’ve begun to approach this in numerous ways such as our Diversity & Inclusion Awards in October, which seek to highlight great initiatives already happening in our industry and inspire others to look at ways we can become more diverse and inclusive.
We are also delighted to be collaborating with the Chartered Institute for Securities & Investment (CISI) on the development and implementation of a school leavers program to help provide access to firms from a broader base of students, increasing gender, economic and ethnic diversity within financial advice roles throughout our profession.
The wider argument
While the social argument for this is undeniable, there are many other compelling reasons to engage with this. For example, findings from the Social Mobility Commission underline that the better off are still 80% more likely to make it into professional jobs while only 12% of chief executives are from working class backgrounds.
Then there’s the positive impact on a company’s bottom line. Research by McKinsey shows improving the gender balance within the workplace could realistically add £150 billion to UK GDP by 2025, and that improving racial and ethnic diversity within an organisation can positively impact financial performance by up to 35%. Additionally, firms with greater gender and ethnic diversity on their executive teams are 21- 33% more likely to outperform on profitability than their counterparts.
This is also about how we think. Neurodiversity has been shown to challenge groupthink and improve decision making, whilst new entrants from different backgrounds and cultures will allow our industry to access new thinking and creativity, helping us to innovate and grow as a profession.
Regulatory action is likely
HM Treasury’s Women in Finance Charter, which PIMFA signed in 2017, reflects the government’s aspiration to see gender balance at all levels across financial services firms. The FCA have recently launched a consultation on proposals to improve transparency for investors on the diversity of listed company boards and their executive management teams.
Speaking after the recent Charter review, the FCA’s CEO Nikhil Rathi stated that “We care because diversity reduces conduct risk and those firms that fail to reflect society run the risk of poorly serving diverse communities. And, at that point, diversity and inclusion become regulatory issues.”
Regulatory intervention in this space may well come via the Senior Managers and Certification Regime (SM&CR), which has applied to all financial services companies since December 2019. Under this regime, the most senior staff at firms are deemed “senior managers” and must be approved by the FCA before taking on their roles. They must also have an FCA-approved statement of responsibilities.
Encouraging new entrants
Few school leavers are even aware of the roles and opportunities that exist within our sector. Currently, only one university in the country currently offers a financial planning degree. So how will this initiative improve things?
The school leaver program comprises the CISI Professional body qualification, skills workshops, insight events and a two-year employment placement. Year 13 Students will complete the CISI Level 2 Award in Fundamentals of Financial Services qualification as a prerequisite and then embark on work-ready skills workshops, insight events and interviews facilitated by CISI and PIMFA firms.
When the students leave school with their qualification, they will work with firms on a two- year employment program during which the students will sit the CISI Level 4 Investment Advice Diploma, with the Financial Planning and Advice paper as the elected module.
The CISI will source a teacher, provide teaching tools and offer the professional qualifications at a significantly discounted price. The CISI Regional Network and PIMFA firms will also support the students with mentors, insight events, and an understanding of the expectations and demands of working life. We will also co-ordinate with charities such as Smart Life to ensure students have appropriate clothing and equipment.
All that is required from participating firms is their involvement in workshops and insight days, interviewing students for work placement, a fixed salary and two-year employment on completion of the school program from September 2022 and a further £1000 per student towards study and the teaching post, including exam costs.
Through this initiative, we can help to build a future[1]proofed industry that will serve our next-generation clients and their evolving needs, allowing firms to nurture a greater connection with and understanding of their clients and their demands as our world continues to evolve.
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About Liz Field
Liz Field Liz joined PIMFA (then known as the Wealth Management Association) as Chief Executive in 2014.
She has 30 years financial services experience, 19 of which as a Chief Executive. She successfully transformed and advised several businesses through redefining strategy, re-branding, change management and inspirational leadership, creating profitable businesses.
She has substantive experience of people and corporate culture risk, regulatory knowhow across the industry – banking, insurance and wealth management and providing good practice guidelines for the industry to adopt.
She is an accredited coach and industry leader encouraging collaborative participation of diverse groups of industry experts to address sector challenges and to leverage industry resources for collective benefit.
Liz holds a degree in Psychology and a Masters in Occupational Psychology from Birkbeck
