Awareness, training and support: is this how we tackle the adviser shortage?

0:11Hello and welcome to this week's edition of the FT Advisor podcast. I'm Amy Austin, News Editor at FT Advisor, and today I'll be taking a look at how we can train the next generation of advisors and why this is important. Today I am joined in the studio by Sean Standwick from MLP Wealth and Tom Hegarty from Simply Biz and the New Talent Alliance. Thank you both for coming in to chat about this issue today. Thanks for the invite. It's a topic that I love to chat about so I'm sure we will have a great time doing this. So just to kind of segue our way in, according to FCA data there are around 31 ,000 advisors now giving advice across all firms but this is a number which has kind of been around the same since 2021 which I'm sure you both are very aware of so it kind of shows that there are really not enough advisors coming in because you know we are going to see a lot retiring so why do we have this shortage of advisors and maybe tom we can start with you so the um as you refer to the the sort of figures which from you and i have both been working on some figures um which seem to have been uh slightly difficult to get hold of actually but you're right the number of advisors has stayed static about 31 000 um but the number of firms has reduced so over the last three and a half years the number of firms has gone down by 17 so it's a fair it's fairly significant um and we have been saying for ages that there's going to be this exit of loads of loads of advisors as they start to retire over the coming years and we are seeing that but the the the the numbers and the sort of demographics that we just referred to there are indicating that over the next probably 10 years my estimate is about 40 percent of the advisor population will retire so we need to replenish that so um why are we seeing a challenge in recruiting new people it's a combination of things it's there isn't enough awareness um you know across every everyone in schools and universities have heard of accountancy and law and solicitors and various other occupations but not really financial advice heard of financial services but of course that that's so broad it covers insurance and banking and all sorts of areas so financial advice specifically i think we need to create more awareness and there's ways we could do that um financial education is another i think the more people know about some of these personal investment uh you know personal finance um you know uh topics that they'll understand more and actually have a you may have a desire to actually get involved in in that area as well and i think the the other problem that we've had is the barriers of entry so years ago they used to be a lot easier to get into the sector but since rdr we've um we've raised the qualification barrier there's also the regulatory requirements are a bit more onerous it's a bit more expensive there's a number so there's a combination of factors of why we're in the position that we're in now yeah yeah yeah and sure and i mean you you've got your own firm and stuff like is it hard to trade advisors is this why it's kind of yeah i think we've also got to remember the context of our industry that you know a lot of and certainly historically it was a lot of one-man bands there are a lot of small firms and for those kind of people it's really hard i mean often when you run a small business you just find fires yeah and so to think i've got to bring someone on here got to train them up even the thought of it could be overwhelming uh and plus people just don't know how to do it um so we've we have been through the process we have learned but also we've had great hires that have also helped bring other people on yeah so some somewhat also fortuitous in some ways i mean i was probably and i suppose maybe somewhat my brother as well but maybe i was kind of like the first one in our firm and i fell into it um which most of them do exactly i was going to say how many people do you hear and i i actually went came uh self-employed thinking i will set up my business a different business doing something else and here i am nearly 12 years later running the firm so it just really also to point out that what an incredible opportunity there is and what great fun it can be.

4:30And to Tom's point, I think we've got to do more to promote the profession, shout about it. And, yeah, we need to get more people into it. I mean, it's quite interesting with those numbers, isn't it? Because we all know they've remained pretty static, but some of the demographics have changed. There's been an increase in those from, what, 30 to 39. And I think a lot of the good work from some of the bigger firms, having their academies has helped with that. But there's definitely way more that can be done, and we bring young people on, and we work with them, and it's been a game changer for us.

5:07I just think, again, there's an opportunity for business owners, and you can be a small business, you don't need to be a big one. There's also an incredible opportunity for people out there to get into the profession. I mean, only 9 % of people have regulated advice and yet 57 % of people say they would seek some kind of financial advice at some point in their life. Yeah. Yeah. Well, speaking about academies, as you mentioned them, I mean, we started with SJPs, you know, that was what, 2012, I think they set up their academies. There really wasn't that long ago when you think about it. And obviously, since then, we've seen more and more pop up.

5:45um i mean tom i know you've been in the academies world a bit um do academies help do you think do you think that this is how we really are training the crux of the advisors coming in i mean do they help yeah without a doubt i mean because they're going to bring in the new advisor as sean said the actual demographic that's increased in age bracket is 30 to 39 which is kind of that that sweet spot for where the academies are trained they're not bringing people straight out of kind of school college university because you know it's more likely that you have people who are moving professions and they've got a bit more life experience that then you know move into financial advice they help without a doubt the the demographics i referred to earlier about the number of firms decreasing though is is a slight concern for me because it means that there is slightly less choice for the consumers that are looking for advice so if we what's happening in effect is the larger firms are getting bigger and the smaller firms are kind of disappearing and diminishing at the same time which which limits choice for consumers um so yes the academies help but most of the academies that that exist are within those at least medium if not large firms who've got the you know the resources the experience the um the budgets to be able to fund those sorts of academies and and generally the the the um uh individuals that go go through those academies end up in those larger firms so those firms are growing um and it's a way of them bringing new new talent into the profession now that happened you know again decades ago the banks used to bring in loads of people people have heard of allied dunbar and abbey life and these firms who brought in huge swathes of um of new advisors and they eventually sort of make their way into other businesses some of them might start their own they may merge with others so they might not stay in those you know in those current businesses their whole lives so at least it's it's bringing more people in but i think where the gap is um is where smaller firms need support as well and smaller firms don't have the experience and the uh the capability to set up their academies so they need to be able to leverage off somewhere that can help them you know train develop and manage and retain new talent themselves as well yeah and like sean obviously do you think that we kind of might need more academies you know from the smaller firms or do you think that maybe the bigger firm should try and maybe they will want to do this open up their academies and you know like train actually bring in and have a program where they train advisors and then pass them back to their firm yeah look i i think either way it's just about having more opportunity so whether it's an academy and whether you call it an academy clearly the bigger companies have that resource to have something very structured that they call an academy um and that's only going to be positive and who knows maybe they could do some you know end up there's got to be obviously an incentive for them so tying a small advisor firm to them that could help them i don't know i don't have the answers that's just popped to mind but certainly you know as a smaller firm um i don't think you need to worry too much about whether it's an academy you just need to give people the opportunity in actual fact in some ways i might argue it's better in a smaller firm because you for example if you work at our firm there are only 11 of us and you can come speak directly to me and My brother, who run the firm, got plenty of experience.

9:15So you get that. We shadow people. We train people. So there are other benefits to being in a smaller firm. You do have to very much think how you train these people, though, and make sure you're keeping them happy. Because if you completely, whilst you're in a small firm, you often get more autonomy, you also need to make sure that they're being looked after, that they're getting the support they need. And, you know, we've all heard it right. And I've had plenty of people come to me who said, well, I was promised X, Y and Z and I got none of it. So you've really got to try and follow through and even just having regular catch ups.

9:56But, yeah, whether it's shadowing, whether it's on the job training. And, you know, when people come into our firm, we make sure they actually get stuck in right away. They're not spending a month or two just doing theory. yeah of course we're regulated so there's gotta be we all know that but within reason and over time we give them more and more and we move that according to them and we tailor it being a smaller firm it's much easier for us to do this when you've got a bigger firm in academy i imagine that's just not possible at that stage yeah so do you kind of offer like mentoring for the younger advisors and stuff and like they can come and sit in client meetings for example behind you and watch how you kind of operate yeah absolutely um and that is really important and even our advisors now um and i keep saying to them you know book me in to some of your meetings um and come and shadow some of mine because that's the best way of learning in actual fact you know one of my advisors katie said exactly that she was i just love shadowing and also don't just shadow me shadow my brother paul because we have slightly different ways of doing it and you can learn from different people but i also think having a good team around you because you you know you sort of sitting next to other people learn all time you overhear a conversation they overhear you and i do know as i mentioned about katie she she's learned lots from one of our advisors james and other people and then they just all talk together and so when you've got a great culture environment good people they help each other yeah i guess you start to learn like your techniques and how you kind of want to give advice and what you want to take for yourself and maybe think maybe that's not for me i'll pass on there um but back to academies kind of um tom simply biz you know in may you said you're gonna launch your own um so that's another academy in the mix training more advisors do you want to kind of talk to us about what you're planning to do yeah briefly unless it isn't to sort of promote anything here at all it's not it's uh and by the way fantastic to hear about that you know sean and how mlp are doing that because you know that's a real success story um small firms generally do struggle because they just haven't got that capability but sean's absolutely right if you if they are fully engaged and and um supporting it then it is a smaller environment they can do a lot more shadowing they can work together whereas these maybe these larger businesses it's a bit more difficult to to do that mentoring process so that's great um from simply biz point of view yeah we we identified that these smaller firms needed some more support so you know it's all well and good that these academies out there but of course smaller directly authorized firms which is what we support within simply biz um you haven't got any kind of resources to help to help them really so we created an academy called it an academy just probably to follow follow suit with everybody else but it's um It's basically the ability for our, we're giving the ability to the firms, members of Simply Biz, the opportunity to basically tap into some of our resources.

12:57So we launched it in, I think, March this year. And we have a number of different pathways, which not just advice pathways as well, because this whole conundrum that we're trying to solve is for administrators, paraplanners, mortgage advisors, and financial planners as well. And often there's a pathway, isn't there? you learn one route and then you progress through it so you find the right talent and then they can structurally sort of follow a process through so there's a number of pathways there we have different professional qualification routes and we're working with a couple of different training providers who can utilize apprenticeship funding obviously apprenticeship funding is only available in england at the moment so we have other pathways for the devolved nations so scotland wales and northern ireland um which is a uh a route which is but all of these routes are qualifications and the kind of knowledge skill and behavioral competencies that are needed which sean mentioned there that's just as important if not more important than the qualifications themselves so it's um we're gonna we're gonna augment the uh academy somewhat as well and provide more of our own training so there are gaps within the whole program that that it's offered at the moment and i think we can fill that with sort of compliance product knowledge technology and and obviously things like mentoring and coaching as well um so yeah it's going really well at the moment yeah we've got um we're well into sort of uh double figures of placing people into the academy and we're governing all of that as well so we're making we're kind of overseeing the journey supporting the employers making sure that they're fully engaged they're not just passing this off to a third party or whatever to help them.

14:41So, yeah, going really well. Good. We're looking forward to seeing what happens then. That's the thing. Looking at the smaller firms, it's great that the Academy is kind of helping with that. Because when I've spoken to them and saying, well, you keep kind of moaning to me about there's not enough advisors, but then you don't train them yourself, so you're not training, you're taking in younger advisors. And they'll come back and say, well, Amy, it's because we train them, we spend all this money on them, we spend all this time on them, and then they go and leave or they go to a different firm or they go to a bigger network um sean training your advisors do you kind of have this worry and like how can we kind of encourage more firms to actually take a leap and like take on younger advisors yeah look i'll talk directly from my experience that's the best place to speak so we have taken people on we've taken graduates on and you know where they didn't last very long one particular person ended up wanting to go into the army just realized coming to us that actually wasn't the career for them you do take on that risk but what i would say is going through this experience we've also learned to recruit much better to interview much better and to scream much better of course none of us really know until they join and you see them for at least a couple of weeks but there are other things you can do to protect yourself what i would say though is so i mentioned earlier we had someone join it's actually katie and she said why don't you i told her what we're trying to do with the business grow a lot very ambitious and should have you thought of a placement program and i said you know typical thing i was oh that's a lot of work and i don't know and is it really worth it all the time she said look i will i've i know well first of all she said seven people of which i'm one who went through a placement program she said six are still in the industry and she said i think you would hire five yeah so when you look at those odds uh obviously this is just one person but i I was like, well, that sounds great.

16:31And she said, look, don't worry. I know what to do. So this is a great hire, right? She said, I will do it all. And you just sign off the job ad. I'll know where to post it. I'll do the screening initial. My brother was involved a little bit earlier with some of the interviews, and I just turned up to the last one. Now, this has been incredible to us. So we've just had our first placement go back to university. He asked to continue one day a week, and he's doing a bit of here and there, dipping in. It's been amazing. and we had another one join in August and she has already in some ways overtaken some other people who have been in the business.

17:08No experience, okay? But when you get a young person that is, and, you know, right from the start we realised she was an outlier, we would contact her, she would answer her phone straight away. Can you send that or sign the contract, Bradley? Yeah, you know, just send it tomorrow. That night she sent it. everything was very quick and when you have people that sort of doers that are very keen and she was so over the moon to have the job and all those things it's a great hire now she she's therefore really keen she's intelligent she actually writes i think probably don't tell anyone better than me and it's really hard to find people that write well especially today with the world we live in um and and so for us it's just been wow if you have the right people and you can and it might be a bit of a journey for you like it has been for us to get to a place and we're still not whoever perfects recruiting right yeah i was at an event last week where i was uh with other business owners and it was uh in our industry what keeps you up at night everybody talked about recruitment so you know but what makes a business it's the people yeah so if you're not going to invest in that you're not investing in your own business and to me now have you know because i didn't start off of course running the business um it's the most rewarding thing when you see people thrive i mean i think it's a human nature thing not because i'm saying i'm wonderful just because it's human nature we're actually the proper education is just teaching other people it's not necessarily just sticking someone in the course it's everything that goes with it so I would just say look give it a go what if it doesn't work for you fine and normally that's just you need to adjust something um but as I say it's for us we found this sweet spot now and we need to increase on this and whenever we've taken actually people on with more experience we find that they can be very set in their ways very resistant to things um again there are always outliers but i just think if you get the right young people they're just very keen you can mold them into what you want what you need and and they will learn very quickly and do very very well yeah and i guess that good experience then like encourages you to you know continue and do it again yeah exactly i mean we did consider having two placement an extra placement this year now i'm thinking we probably should have done um and also don't forget these people aren't expensive yeah it's not like you're trying to and don't forget that again if you hire a power planner or a um financial planner you're gonna have to pay a premium for them because there aren't many um and they know that especially power planners but again um you know you should be offering people good money but the point is is then suddenly you've got this big cost and you're not and therefore you're expecting even more and yet maybe they don't quite understand the way you work and maybe they don't want to adapt to that yeah so where if you take a young person you you don't obviously again you want to pay them properly but obviously they don't come with an experience so you don't need to pay them very much either yeah and tom do you think that this is then where with the younger firms like the apprentices like and apprenticeships can help you know yeah i think so i mean sean just outlined there brilliantly how you know um you know the benefits of taking on you know young and new people new talent straight into the profession which is brilliant but there's no doubt there are concerns out there the the i think one of the biggest problems we've got is actually the employers deciding and and taking that you know taking that decision to to take on somebody new especially if they've not done it before the concerns are usually going to be cost and time time investment and um and experience just not knowing where to start and what to do so if we can overcome those barriers then that's going to help it's not everything i mean but but so apprenticeships are definitely a way forward they're available in england uh anyone over the age of 16 that's got the right to work in the uk um and they they basically uh provide the knowledge skill and behavioral competencies the qualifications on a on a one on a 20 percent time of the role.

21:29So 20 % spent on learning, 80 % within the workplace. But it has to be, it has to be, they have to be utilised by employers that are fully engaged. Like Sean said there, you've got to have the employer that's right behind it all, that's helping manage, helping, you know, shadowing, mentoring, coaching, developing. You can't just have some employer that kind of goes, well, I don't want to spend as much money. I don't want to put all my time into it. I'm going to put them on an apprenticeship and just leave them to it it can't work like that can't emphasize that enough the employer's got to be fully fully engaged and complement all of the work that's being done by the apprenticeship it definitely can save money and time for the employer and it's an easier it removes barriers yeah and to kind of round up I mean because we could talk all day I'm sure I'm sure all three of us I know that we love talking about training advisors um what do you think you know one that needs to really fundamentally change to kind of address this shortage of advisors tom maybe we'll start with you um i think the i think it sits with that last point i made i think employers need to realize that that's the importance i think actually there is quite there is an increasing awareness of um of financial advice as a sector and a career pathway.

22:50But it's the employers that we need more of them to take that step and recruit new talent. And that's where the problem is, I think. So we're trying to, we call it inspire within the New Talent Alliance. We're trying to inspire, and Sean's a great role model for that. We'll be engaging with Sean to try and get other employers inspired to go, yeah, I'm going to do that as well. It's a great way to grow your business and expand. Yeah, brilliant. And Sean, what do you think? Yeah, I mean, I agree with everything you said there, but I would add that we need to just promote the profession more. So how do we do that?

23:26We're here discussing it. We run podcasts. There are loads of podcasts out there, social media, and think, where are these people sort of hanging out that we want? And think we need to put our faces out there and just do more to promote it because then we just make our pool bigger. To your point earlier around people don't know it's an option. And when they do, they'll realize what a great... I mean, look, the need for advice is just going up and up. We're in the highest tax burden since World War II. We've got all these regulations. We've got all these things going on. People just need help. So I would say, yeah, promotion.

24:07And also I would just add that I was just thinking as you were speaking and in general that sort of don't it's really easy isn't it we get set in our ways like we can't take young people we can't that doesn't work for us like try and open your thinking up a bit and just go do you know what if that person left okay why what went wrong there maybe in our interview process we could have improved maybe we didn't miss this or that and if you you will learn it's not a failure you will learn and it is an investment so it's happened with us and now we're in a much better position where we were much better at it and yeah if no doubt i'm we take the risk that at some point someone might join they might be wrong and it doesn't work but but you know it's an investment in the business not every investment in your life and here in the industry works doesn't work exactly just gotta give it a go well thank you both so much coming in today i do appreciate your time and everyone else tune in next week where we will discuss other goings on in the industry but in the meantime for more information on the various advisor academies and what they offer visit our FT Advisor Academy survey which can be found on our website.

25:13Thank you.

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