The UK financial services sector is facing a crisis. But, for once, it has nothing to do with Brexit.
The talent pool across Britain’s advice market is shrinking – working in the industry is just not as desirable as it once was.
A recent survey by professional services firm KPMG found 65% of the UK population would not consider it.
Young adults are especially put off by financial services, as the report also found two thirds (58%) of 25 – 34-year olds working outside the sector said they would not consider it for their next career move.
But how does the industry tackle this pressing issue?
Inspire the next gen
In a bid to ease the talent crisis, Scotland recently unveiled its first nationwide schools programme for financial services in a bid to encourage youngsters to enter the sector.
Also, there have been a handful of advice firms like Quilter and St James’ Place that have unveiled training academies.
Manchester-based wealth firm Equilibrium Asset Management recently launched a recruitment website and training academy to further develop talent both within and outside the company.
Sarah Warburton, head of culture at Equilibrium, told International Adviser: “Competition between firms to recruit the best talent is becoming greater, so we wanted to find a way to attract those already in the sector as well as inspire individuals from outside the profession to consider a change of direction.
“To do this successfully, we need to engage with the right people and encourage them to engage with us – our dedicated recruitment website and academy programme are designed to do just that.
“To be in with a chance of hiring the right people, firms need to take a proactive approach and increasingly look at new ways to find talent.”
Advice firm The Private Office (TPO) was struggling to entice people into its workplace, which forced it open its graduate training programme.
“Finding advisers with an appropriate level of qualification and experience to come and join us has been challenging too,” Stuart Phillips, chief executive at TPO, told IA. “We are also a relatively young team, so we have been growing our talent, operating a graduate training programme for the last five years now.
“We have had a close affinity with the University of Leeds. Bringing on graduate trainees has been a core part of what we do.
“As a long-term sustainable plan, if we can train the right people, then we can end up with a perfect mix of creating own clients and creating our own advisers.”
Advertising the positives
KPMG’s survey highlighted a key barrier that is stopping firms from getting people to join the sector.
Some 41% said the main reason behind not entering the financial services sector is the perception that finance is boring.
So, how can companies expect to persuade people to enter the industry if such pervasive negative connotations persist?
Darren Smith, head of the Quilter Financial Adviser School, told IA: “Many people will have never considered or even heard about financial advice as a profession and even if they have, they may have a misconception about what actually it entails.
“Creating more awareness about how beneficial a career in financial advice is will be a key way to increase the amount of talent flowing into the industry.
“If we concentrate on better advertising the merits of this kind of career such as the flexibility, variety and satisfaction it can bring, we will not only help to make financial advice a more diverse and inclusive industry but also help to bring fresh ideas to the table, which often creates better customer outcomes.”
It might be hard to get people to think about financial services as a first career, especially a young adult looking to enter the working world.
But the profession can be the perfect opportunity for those looking at a second career.
“We have looked to tap into various pools of talent which previously may not have considered a career in financial advice before,” Quilter’s Smith added. “For example, we have had a number of people returning to work after a career break, ex-professional sportspeople and ex-military go through our school after their first career has ended.
“All three groups of people have a plethora of transferable skills and life experiences, which can be put to good use within the industry and it’s important we make these types of people aware that this career is out there and could be perfect for them.”
Lisa Winnard, group people and service director at Sesame Bankhall Group, told IA: “It’s often said that people fall into financial services, rather than follow it as a planned career, and the war for talent within the advice sector is even more challenging.
“Our challenge as an industry is, in the first place, attracting new blood into our profession, which desperately needs not only young people wanting to work in it, but also cultural and gender diversification too.”
Attracting talent, whether from university or for a second career, may not be the only issue in the crisis.
The industry shouldn’t be too distracted by recruitment, as those already in the sector may have an issue with the increasing use of technology, according to the Chartered Institute for Securities and Investment (CISI).
“We believe there is a wider, pressing, but complimentary issue here,” Simon Culhane, chief executive of CISI, told IA. “Owing to the advance of fintech and automation, we see future significant job losses, probably hundreds of thousands, which will be permanently lost within not just our profession but in the wider financial services sector including insurance and retail banking.
“This means there will be a reservoir of talent of those currently working in the financial services profession who will need to be retrained and reskilled.”