Recent research by Panacea Adviser has highlighted the concerns financial advisers have about attracting young talented professionals to the industry. This has the potential to greatly impact consumers’ accessibility to advice and assistance.
Of the 104 advisers questioned for the survey, seven out of ten admitted that they find it difficult to find new advisers and entry-level recruits to the business.
The chief executive of Panacea Adviser, Derek Bradley, spoke about the results of the study and highlighted the correlation between the impending crisis in recruiting financial advisers and the Retail Distribution Review.
Why is the industry struggling?
Customers often cannot afford financial advice or no longer see it as a priority in the current economic situation, meaning that advisers have a smaller customer base.
With a diminishing customer base, recruitment is becoming a lot more difficult, with young professionals choosing careers with more long-term stability. The industry needs to attract more advisers to cater to the customers who still want and can afford advice.
Many of the companies that took part said that advisers leave the industry for new opportunities. Financial advising also needs to be made attractive to potential advisers from outside the industry, with almost 70 percent of the respondents saying that they had not hired anyone outside the industry in two years. As an example, graduates have salary and progression wishes that advisers are simply unable to offer.
There is a lot of training involved in financial advising, with a large number of businesses turning to IFA software from experts such as intelliflo.com to provide a better platform for advisers to work with.
The future of financial advice
The lack of new advisers undoubtedly poses a threat to potential consumers, with 87 percent of advisers concerned about the future of the industry. If the numbers continue to decrease, this could have an enormous impact on the cost of financial advice, with advisers having to be selective about the clients they take on.
Recruitment is just the first part of the process. With companies struggling to retain advisers, they also need to look at incentives to convince them to stay. Salaries, promotion, and long-term goals are all major concerns. Advisers need to ensure they train their employees and work with them to establish good adviser and customer relationships.