Why the profession needs to shout about apprenticeships

0:03Amy Austin: Hello and welcome to the FT Advisor podcast. Each week we'll be joined by guests from the financial services world to discuss the most pressing industry issues. I'm Amy Austin, News Editor at FT Advisor and today I will be discussing Advisor Apprenticeships with Tom Hegarty, Chair of the New Talent Alliance and the Apprenticeship Trailblazer Group and Rachael Fennessey, Founder of recruitment agency Aspire Executive Search. so welcome to you both thanks for joining us today morning thanks Amy thanks for having us thank you so a new combined apprenticeship standard for financial planning and power planning came into force last month Tom I know you're pretty instrumental in you know making this happen so I wondered if you could just like start off by explaining you know what's changed why this new type of apprenticeship was needed etc yeah apprenticeships in financial planning and paraplaning did exist previously, only in England, of course, as well.

1:02And they, I think, went back to about 2016, which I think the paraplanner was first, then the financial planner or financial advisor standard in 2017. And then what happens is where the apprenticeships have to go through a process every few years to get revised for various reasons, obviously, just to update the way that things operate and make sure they don't go out of date. So I was invited to chair the Trailblazer Group in 2021. So this is highlighting how long it's taken, a few years to get to where we are. And you go through a process of starting with the kind of the occupational definition.

1:39They've added in something called duties as well. And then we have to go through quite a meticulous process of updating the knowledge, skill and behavioural competencies. When I got involved in the process to start with, there was already an idea which was part of the Institute for Apprenticeships as well, which was to kind of combine some standards together. Because I think at the moment we have about 700 standards across the whole of all industries. So there is a kind of way that you can merge them together. And we realized that probably about 80 % of the competencies between power planning and financial planning were the same.

2:12And then about 20 % where the differences sit. So we went down this route of doing what's called a core and options approach. So it means that the apprentices can go on a program and study lots of similar knowledge, skill and behavioral competencies and set the same exams. So the previous paraplanner apprenticeship was the diploma in paraplanning rather than the same qualifications that a regulated financial planner would go through. So we've aligned those. So the qualifications are the same. there's still three there's three professional bodies that that can be used the cii libf and cisi and then all these things have been updated um i can give you a bit more detail so with the knowledge skill and behavioral competencies there are things like ai esg dei lots of acronyms that have now been added into some of those competencies to bring them up to date and we've changed some of the end point assessment parts as well because that was where there was some issues around apprentices dropping out of the process before completion so they now have to complete the regulation and ethics module under the end point assessment process so that should help you know improve the number of completions with the apprenticeship and before

3:33Amy Austin: you know this new one came into force was there a lot of you know uptake for apprenticeships did you say or uh there was a fair uptake actually um a good several hundred over the years but the issue was the dropout rate actually which was it was the majority let's say that were dropping out rather than completing and what happens is because the the apprenticeships are governed by the institute for apprenticeships and ofsted as well they can look at that completion rate and start getting you know twitchy that it's not meeting what people are expecting and the dropout rates sort of indicates that it might not be best place to continue so there is there is a risk i guess that um if completion rates drop below a certain level we could end up with uh ofsted or or the institute for apprenticeships now skills england actually making a decision to pull the apprenticeship off uh out of availability which would be a shame yeah exactly and rachel on the kind of recruitment side do you see demand for kind of apprenticeships coming through um there's well across the profession there's a huge demand we know that we know the stats um on why it's needed i from my perspective i'm finding that there is more awareness of it but i i don't feel there's enough awareness around how to access it and that's what doing podcasts like this i think can really help employers um have the way with all to and the understanding on how accessible it is and how to implement it in their businesses because that's what I think the lacking is it's the it's the know-how of how to yeah how to access them but I know that a lot of the clients that we work with have been utilizing the previous apprenticeship scheme not enough but there is there is there is a growing a growing uptake on it I was curious to know Tom what do you think the reason behind the dropout is is it purely that end point assessment or what is it because obviously i'm sure it's looking at yeah it's there's there's a few bits to it but i think the the main the main bit is actually that you have to complete the qualifications of course but when you've completed the qualifications a lot of time the employer will look at that and say well i've now got somebody that's been funded all the way through and got all the qualifications is there any reason for them to stay on and do this endpoint assessment so one of the aspects for that is that the fully full completion isn't recognized in the way it should be um you know if you did a degree at university for example you'd come out with a ba or a bsc or whatever and that's the recognition so it is the qualification apprenticeships are different because they do recognize not just the qualification but the skills and behavioral aspects as well which have been demonstrated in that endpoint assessment process but it takes an extra six months on top of your qualifications to get there and it goes and so i think the employers and the apprentices look at it and think well what's the point i've done all this other stuff already so so we within the new talent alliance we're actually trying to address that with giving more reward or recognition to people who've fully completed the apprenticeship i'd like to get a message out to potential employers to say look this is a great scheme and if you utilize it please do do do us all a favor by by supporting and pushing your apprentice all the way through to completion because you know you you don't want to just sort of take and then not give anything back to the sector we need people to you know really kind of embrace the full end-to-end process but some there's also some reforms coming uh with skills england as well so they're gonna they're gonna look to maybe make the endpoint assessment process simpler and if they do that that'll help you know everybody really less time that would help wasn't it if that six month period could be um reduced i bet that would make a difference yeah it's quite a it's quite an onerous process but as i say what we've done now is we've integrated the uh the regulation and ethics exam sitting into the endpoint assessment as one of the assessment methods so it kind of means that you you go you go through all the exams and do the qualifications but you don't do everything you you wait and do the last exam in the end point assessment so that might kind of encourage people to to hold off uh dropping out or anything uh as well just employers understanding that they can get the funding so it's helping their businesses grow they're helping the profession but that actually if they're not seeing it all the way through then there is a risk that it could be cut and it's something that we all know is hugely needed in the profession it just seems weird because you feel like if you're in in it why would you not want to do the whole shebang you know like i feel like if i've committed to something i would want to see it through to the end but maybe that's just like a personality thing rather than i guess if you want to work you want to work don't you but i guess it will help i agree i mean they're working anyway so they're still earning and still you know exactly doing the four days a week or the 80 percent of their work in the in the role um but it's just maybe that that piece of having to do additional work um so the endpoint assessment methods now is the integrated qualification and then there's a professional discussion with a portfolio of evidence and then there's a case study with a q a session which you know you can imagine an apprentice has has to put a fair bit of work into that and when they've already got their diploma level qualification and could start seeing clients and start giving advice or or doing the power planning work they kind of look at it and go do i really need to do that so we are one of the things we're trying to do is encourage the professional bodies to actually do a almost a graduation ceremony so anyone that comes through an apprenticeship route we actually collectively as a as a sector we we congratulate them in a you know and and give them some sort of award ceremony yeah i was gonna say like awards would help wouldn't it you know best performer or like highest score on the epa yeah you know it would give you something to work towards to be like look at me and then you could be promoting that kind of thing out through um like schools and because that's the thing as well isn't it it's the awareness for the potential apprenticeships to go on but that that kind of thing would really enhance that but i think that's a good idea tom yeah so will the um you know the bodies or like the new town alliance are you planning to go into schools to kind of like push this apprenticeship and say here it is this exists no we're not actually um i think when we discussed the the the remit really of the new talent alliance we we we drew a line uh at getting out and trying to speak to the actual new talent themselves because it's just a minefield you know you've you've got to create contacts with schools colleges universities online hubs um all sorts of things but there are other initiatives one being the future financial advisor initiative which which is aiming to do that through social media and raise awareness of careers in advice so they're going to probably target that and we we could probably you know get get more information on apprenticeships added into that yeah that's the thing it's just getting out there isn't it like but maybe the professional bodies could help they they could be maybe doing a bit more definitely kind of say hey this exists why don't you give it a go you know yeah and in the curriculum for schools if it could be added in to site that you know the careers advice that get but even if just careers careers advisory centers had the information but i guess that's like you said tom that's you new talent alliance haven't taken that part of the process on yeah it's it's just so much to do i think we we've looked at things like that before and um like i say it is a bit of a minefield we need to tackle it we need to try and get the message out there but we we probably don't want to all all replicate the same initiatives if they're you know being done elsewhere so um yeah

11:39Amy Austin: and what about kind of you know why would you say for someone to do like an apprenticeship over say going into like an advice academy like what's the kind of difference between the two and what works better for some people and what doesn't well from my point of view the the main criteria with apprenticeships is you've got to be an employee yeah so there has been a bit of a push and a bit of um uh you know a a move for for or the desire for firms to offer employed roles because we think that that's more likely to have people commit and and retain their positions so the academies i think mainly are self-employed roles you know where which can result in somebody running their own business whatever but yeah apprenticeships have to be employed positions so um and that's really the only correct i mean anyone who doesn't know the criteria it's basically you've got to be able to work in the UK.

12:38You've got to be over, I think, the age of 16 now. There's no upper age limit now. And you need to be employed. And an apprenticeship means that you spend 80 % of your time in the workplace, actually doing a role of some sort, and then 20 % doing the off-the-job training and development. So that's all the workshops and the exam qualifications and learning all of the various competencies. And the new funding band, which I didn't mention, because we have mentioned the financial element, is£13 ,000. So anybody who is a firm who has an employee can actually get government funding of£13 ,000, 95 % of that.

13:26They actually have to pay what's called a co-investment, which is 5 % of that amount, so£650. but the remaining balance is paid by government apprenticeship funds which is great yeah I mean

13:36Amy Austin: yeah that will help that's the thing won't it like to put people through them because I guess I guess then apprenticeships are kind of for the people that I know myself I would be really daunted to go self-employed I'd be like oh my gosh like this is scary whereas I feel like if I was in a firm I'd be a lot more comfortable you know learning especially if I was young you know you're 18 19 20 year olds I feel like apprenticeships would really suit them because they're kind of out of school and university and a bit like what do I do you know they might not have ever had you know a proper job you kind of thing so maybe that could work I don't know what you think Rachel.

14:10I 100 % agree it's it's a it's not just the practical side of things going self-employed it's also it's just not for everyone it's not everyone's mindset and if people kind of take the academy route and they're just not wanting to have their own business it's a road to nowhere yeah they're getting the qualifications but they're not getting the hands-on training and development and um this this route the apprenticeship route when you're actually fully involved in a business you're employed you're learning you have the structured mentorship it's it's a more successful route to do it and yeah I think even if you could practically do it when you were young few people that age they want to have their own business which is the self-employed route

14:53Amy Austin: yeah and I guess with advice as well they can you know sit on client meetings and that so they can actually see quite early on if it's something they want to do or you know if they think actually no maybe I stick to power planning or actually no I want to be an advisor at least they can kind of see that right from the offset so kind of have the thing in their head of what they want to do which I guess is always very handy yeah and experience it in an office learn from other people so it's not just the structured training you're actually part of a business um and when you're in a small business people have to jump in and help out doing many different roles and it's a great way to learn which is why people have rather than having them working remotely most businesses will have trainees and apprenticeships they'll have them in the office because they can just learn more at a faster rate yeah and it's just I guess as well it's just office life as well like sometimes it can be quite daunting and new can't it so just getting to know people is quite nice um but when i've the thing is when i've spoken to smaller business owners before about apprenticeships and being like you know why don't not maybe apprenticeships but being like why you know they they are quite often the the main moaners that there aren't enough people in the industry um but they're also the people that won't do anything about it but for good reason because they say they train these individuals they put them through their exams you know thousands of pounds they pay for it all and then a big firm will look at them go they look good and snap them up or you know approach them or you know their trainee themselves will just go and naturally go and look for somewhere else so they kind of put off from doing it because obviously they're paying all this money for their person to then just walk away and then they've got to start all over again so they were kind of you know some people I've spoken to before were like we don't want to be the like the trainers for the bigger firms um would apprenticeships help this then because of the funding you know is this something that would help them well I mean I would take it you'll well we'll probably both Tom and I'll probably both have different answers well we will have different answers on this but my view on that is if a business brings in an apprenticeship and they as part before they bring them in and make that investment of time into them actually looking at values and bringing in an individual who's got potential so these are people they haven't got any experience they're not polished but as kind of like that little onboarding piece looking at what the individual's values are what their potential is so that they're aligned to the business and if if an individual is aligned from a values perspective to a business they won't leave they're not going to just go if they're being looked after they're valued and they're aligned to the business there's absolutely no reason to suggest that they would go then to a big corporate once they've got the training so to me that's about the beginning part of that process to negate that being an issue and if that's not done then yeah it could be an issue but that's the same in um in any kind of recruitment and growth but do it properly and it won't be a problem that's that's my view on that well no i totally agree i think the i think it's all done at that initial engagement piece where the uh the discussion between the employer and the trainee needs to be um aligned and if um the employer does need to carry on supporting i think there are some instances where the employer doesn't really invest enough and they maybe use the apprenticeships as almost just we can outsource the individual to you know a third training company and they can do all the heavy lifting and hard work but the employer absolutely needs to be uh supportive and um you know mentoring managing motivating throughout that journey and helping with the you know the challenges that the trainee faces but yeah if they do it right and they and they should pay them appropriately by the way as well because obviously you can you can on apprenticeships pay less than the minimum wage especially if they're young there's like a i can't remember it was about four pounds an hour or something you know but if you pay what you if you pay that rate you'll you'll get what you deserve which is that they'll leave so you pay pay the appropriate weight uh wage and um and you'll expect to retain those individuals um and of course you know these small firms need succession planning so there's a huge opportunity there for these individuals coming through to then be given potentially you know clients or shares in the company or be the succession plan for the person employing them as well so there are lots of opportunities there yeah yeah totally if you look after your staff they won't want to leave will they they won't and tom's right you know we also we know that the two kind of main stat well there's three main stats in the industry but the lack of younger advisors but also the heavy weighting on retiring advisors so like circa three-fifths they do need successes and this is the best way to bring in talent and grow them how you want them to be to look after your clients how you want them to be looked after and who like what if someone's going to financial planning and they'll be given that opportunity they just and they can see where they can go in a business there'd be absolutely no reason for them to go anywhere exactly and right so Rachel what would you like to see from apprenticeships from in like the next couple of years personally it's more it's it's more awareness so more you know people like me who are working with these firms the more awareness that we can get out how accessible it is for firms to do it it's uptake and awareness and understanding about this whole like getting them through to completing which i think your idea that we discussed earlier would really help that um but yeah to me it's awareness and uptake and implementation and tom what can we expect to see i'm pretty pretty similar to that really i think um it look it's an amazing opportunity really you know what i guess the objections a lot of the time are from employers are i don't know where to get people from um i don't know you know it's going to be really expensive to train them i haven't got the time to do it i haven't got the expertise um this is this is an opportunity which is is uh funded so it's paid for there's a whole um you know track to run down in terms of all the not just the qualifications but all of the other competencies as well and the training providers can actually help the employers shape what they should do in the in the role as well so the four days where you've got the employer's got the trainee in their office or whatever the training providers can actually help give some guidance around what to do in that four days a week as well it's a great it's a great opportunity i agree that it's not there isn't enough awareness it's a little bit of a kind of too good to be true scenario with all the funding that's there so yeah we need to get the message out and for employers to understand it and why they need to recruit as well which is really important i guess it's a watch this space and see what happens now it's set up and running um well thank you both for joining us today and everyone else tune in next week where we will discuss other goings on in the industry

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