There have been many recent comments and statistics published post-RDR about how the adviser sector is shrinking as traditional advisers exit the market. Figures from the Financial Conduct Authority in March found adviser numbers dropped from 40,566 in December 2011 to 31,132 in December 2012.
As a result, even to meet existing demand it is almost inevitable that new talent will be needed to fill the advice gap and it's no surprise that many Financial Planning firms are turning their attentions to the talent pool available in the graduate market.
Tens of thousands of graduates are leaving the UK's universities this summer, many with degrees in subjects such as Maths, Economics, Business and Accounting. Some will have career paths already mapped out with banks and accounting and law firms but others will be less sure of what lies ahead and be seeking something different.
With a sticky jobs market in many areas, it's no surprise that some graduates are searching harder and being turned on to the idea of a career in Financial Planning. While still small in absolute adviser numbers, it Financial Planning is a growing sector of the economy with good growth prospects and good pay – ideal factors for ambitious graduates looking for long term progression and decent opportunities.
Justin Urquhart Stewart, director at 7IM, which sponsors the IFP's University Team Challenge competition, believes more graduates should consider Financial Planning. He said: "I think people would be stark raving bonkers not to consider a career in Financial Planning. I would if I was starting out today.
"You've got a combination of factors that make a unique situation: the economy - because we're living in a time of austerity and people need help; regulatory change to make it a professional industry and technological advances that allows the Financial Planner to do their job better. The Financial Planner can provide an ethical service and create a long-term business."
Despite the benefits and opportunities, many graduates appear unaware of Financial Planning and the sector has suffered in the past from a low profile in the graduate recruitment market. Many graduates may not understand what Financial Planning is or the varied career routes that it offers. This is backed up by anecdotal evidence from seasoned Financial Planners themselves.
Many planners admit that they more or less 'fell into' Financial Planning or considered Financial Planning as a second career after perhaps working in accountancy, education, the military or another profession. The lack of awareness surrounding Financial Planning careers is evident.
Manchester Metropolitan University (MMU) runs an undergraduate degree covering Financial Planning and with long term support from the IFP but lecturer Trevor Williamson said it was "so frustrating" as student numbers were low. He said: "When I speak to students at open days and explain what Financial Planning is all about and the employment prospects they're interested but when they go back to their parents and say they want to study Financial Planning, I think the parents don't know what it is and think their child should go into something conventional like accounting.
"It's so frustrating because I've got firms ringing me up all the time because they've heard about the course and are looking to recruit our graduates but unfortunately there aren't the students out there." He said it was common for the university to try to persuade people to switch from an accounting course to the Financial Planning course in their second year.
In contrast, he said the Financial Planning Masters programme run by the university was "brilliant" and that there was much more interest in that from existing Financial Planners.
There is also a lack of large prominent Financial Planning firms whose names students would have heard of. Students are aware of banks such as Barclays or firms like Ernst & Young (now EY) but large- scale firms are thin on the Financial Planning ground. Financial services firms make up seven of the top 10 largest graduate recruiters; PwC, Deloitte, RBS, Ernst & Young, KPMG, Barclays and Lloyds Banking Group but none are explicitly advisory firms in the Financial Planning sense.
The largest recruiters of Financial Planners are usually firms that have a Financial Planning department, rather than standalone firms. Grant Thornton takes on placement students and graduates who then work towards their Certificate in Financial Planning as does IFP Accredited Financial Planning FirmTM Mazars.
But for those who are keener to work in a smaller group rather than a large corporate business, Financial Planning offers close-knit teams, more opportunity to learn and apply a range of skills and a bespoke offering for clients. History and politics graduate Jon Bean joined IFP Accredited Financial Planning FirmTM Eldon Financial Planning in 2006. Mr Bean did not have a degree in a Financial Planning related field but said he was attracted to the firm by the prospect of development.
He said: "I'd always had an interest in finance and economics so it seemed natural to look there for jobs. Prior to joining Eldon though, I was only aware of stockbroking and sales, not Financial Planning the way Eldon does it. I was keen to find out more about how to provide a Financial Planning service.
"I joined the firm as an administrator but always wanted to move towards an adviser role. Eldon have been very supportive and the development of staff is key, they pay for the first sittings of your exams."
However, he warned that becoming a Financial Planner could take as long as six years from graduation so it was a long process for the both the graduate and the firm. For firms, there is also the advantage that the graduate is untainted by any previous experience in the financial sector and can be trained from scratch as a Financial Planner for the post-RDR era.
Mr Urquhart Stewart said: "Firms need to think of it as doing their bit to develop the next generation. They need people who recognise Financial Planning as a business and profession, not just people who have a good degree but also people who have the right ethics and attitudes."
So what can be done to promote Financial Planning and its possibilities as a career? The IFP already holds the University Team Challenge in association with Seven Investment Management and has an award for Financial Planning Student of the Year. The University Team Challenge is an annual competition where teams of four undergraduates complete a case study, similar to the case study for CFPCM certification. Aviva runs a Future Adviser programme where undergraduates can compete to win a six-week paid internship at Aviva. Both Mr Molloy and Mr Benson took part in this programme. This helps students gain valuable work experience and the students' CVs are featured on the Aviva website.
Mr Williamson suggested firms which were supportive of the MMU course and wanted to hire its graduates could offer sponsorship to students. He also hoped that the media would do more to promote Financial Planning. He said: "The media seem to be writing more about Financial Planning nowadays and realise the differences between Financial Planning and financial advice. I'm convinced the able students on my course will be snapped up when they graduate and I hope these good news stories will spread the word."
Tuesday, 23 July 2013 16:01
News analysis: Graduates in Financial PlanningWritten by Administrator
Britain's job-hungry graduates have plenty of opportunites in Financial Planning but are they aware of the opening's available to them? Laura Dew reports on the challenges.