With competition in the market fierce for a limited pool of candidates, some financial services firms are looking to training academies to usher in the next generation of Financial Advisers
The Financial sector is currently undergoing something of a workplace revolution. The marketplace is changing rapidly, and talented candidates are becoming increasingly sought after across all levels of business, especially in wealth management. With many firms struggling to hire an ever-shrinking pool of skilled applicants, and with an estimated shortage of up to 5,000 Advisers to service a rapidly-aging population, Financial businesses are developing their own ways to tackle the shortage: training academies, which provide on-the-job training for entry-level candidates.
What repercussions do these academies have for the Financial Services market? Our Managing Consultant Jack Lawlor reveals what to expect from this new trend in the coming years.
What kind of services are these training academies offering?
Training academies provide industry training and industry qualifications to people looking to build a career in Financial Services. Though these schemes are mainly for graduates, anyone can join a training academy. They provide a way in, build up people’s knowledge of the industry and let companies grow talent themselves rather than compete for it.
Why are firms starting up their own training academies?
Though several factors have contributed the rise in academies, the fact that these programmes are springing up is mainly due to there being a real lack of genuine, good quality candidates with relevant experience and qualifications in the industry. As there simply aren’t enough candidates to go around, companies are starting to look at nurturing talent from within, rather than trying to hire individuals from rival companies.
What are the advantages of going to a firm-run training academy, rather than a more traditional course at university?
It gives the students the chance to get hands-on experience from a Financial Planning company, who deal with and provide financial advice to clients. People who join academies receive on-the-job training and develop skills through real-life experience; as a result, many candidates are better prepared to start working full-time upon graduating. You learn from industry experts and gain essential qualifications along the way: all Financial Advisers need to pass a series of RDR exams to qualify as a Financial Adviser, and these academies will coach you through sitting them.
Academies also let firms train people who know their company inside out: to have somebody who understands how business is done on every level from the bottom up undoubtedly makes for a better, more efficient employee.
Is the state of the market influencing this trend? Is the market becoming more competitive, and is there more of a demand for talent?
Since the Retail Distribution Review was introduced, the number of Financial Advisers in the market has plummeted: RDR requires all Financial Advisers to sit various exams in order to qualify as an Adviser, and so the number sank from 40,000 pre-RDR to half that number in the intervening years. However, the need for financial advice has increased due to a change in pensions regulations and various other changes, so a limited number of Advisers are having to cope with increased demand.
Thanks to the RDR, the quality of Financial Advice has improved, however the market has therefore become incredibly competitive. Because firms are competing over a limited number of good quality candidates, salaries are being driven up higher than they have ever been before.
Do you see this trend continuing in the future?
Yes, I do. Unless more companies introduce Financial Planning Training Academies or graduate schemes to attract young, hungry individuals into Financial Services, the number of Advisers may continue to fall and competition for skilled graduates will continue to increase. This is why the training academies are a solid way to grow talent within the industry.
Do you think that these academies will change the state of the market?
I believe these academies will make it easier for graduates to get jobs within Financial Services. It gives them a foot in the door and an easier route into Financial Planning companies. There aren’t many companies out there that take on graduates and people with no experience within the industry, so more of these academies will give more people relevant industry knowledge, therefore increasing the Financial Services talent pool.
Which training academies do IDEX’s clients use?
Old Mutual’s Financial Services Academy aims to address the shortage of Chartered Financial Planners in the industry, especially as upcoming law dictates that by July 2017 corporate Chartered firms need at least 25% of their Advisers to be Chartered Financial Planners. With customers seeking trusted planners, the five-day course takes place over six months; Old Mutual has recently also branched out into developing the next branch of Financial Advisers through its Financial Adviser School.
St James’s Place’s Academy offers training for people who not have had any training in financial advice. It accepts individuals from every career path and age who want to make a change, and is a full-time course that provides complete training for people who want to become professional Wealth Advisers. After two years, involving workplace training and experience, graduates will then receive a St. James’ Place Partnership and take an active role in the company.