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Adviser Workshop: How the RDR can usher in new blood to financial advice

by Jun Merrett on Jan 10, 2013 at 14:46

Adviser Workshop: How the RDR can usher in new blood to financial advice

The push towards professionalism driven by the retail distribution review is attracting young graduates to adviser firms, a benefit Jeremy Davis, Adrian Murphy and Mike Holden have been taking advantage of.

Jeremy Davis

Managing director, 35 Finance

We have recently hired three graduates as part of the firm’s emphasis on professionalism and fresher faces.

The retail distribution review (RDR) has provided the opportunity of publicising to clients and potential clients that there is a higher degree of professionalism in the industry. This has encouraged the younger generation to be a part of it and become advisers.

We want to be at the vanguard of this, making sure we are upgrading our staff not just from the qualifications point of view, but that we are also providing a fresh new-world mind-set.

Graduates don’t have the history of working in an old-model world: they are not used to taking commission. So it is great for us because it is a completely fresh start for them in the new fee-based world.

Tie-ups with universities

We found our graduates through our professional connections. But in the future we would like to forge ties with a university and recruit graduates that way.

We are closely associated with the University of Cambridge. This is something we want to cultivate as we anticipate more people will want to be involved in the industry. This is the way it has happened in the US: financial planning has become a major career choice for university graduates. Usually the UK follows the US, so we could see that happening here too.

Fast development opportunities

I think the graduates were attracted by the feeling that in joining the firm, they are getting on the ground floor of something that is going to take off. They are part of something growing and developing that will make a difference.

They have the opportunity of moving up quicker to a higher level this way than perhaps if they joined a larger organisation.

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11 comments so far. Why not have your say?

Mike Hardy

Jan 10, 2013 at 15:36

Are these new recruits aware that if they make a mistake they can be hounded to their graves by the regulator? I think anybody entering the advice business now wants their bumps felt.

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John Smyth 3

Jan 10, 2013 at 15:45

I agree with Mike Hardy and so do most IFAs I come in contact with.

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Chris Miller

Jan 10, 2013 at 15:47

Every single recruiter that has ever talked to me about joining them, whether it's a practice or network, has NEVER, repeat NEVER ventillated any of the downsides/risks associated with the potential move to them.

Get them on board first, then let them find out about the caccy end of the stick seems to be their modus operandi.

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Mike Hardy

Jan 10, 2013 at 15:54

Caccy doesnt quite do it justice!

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Bob Donaldson

Jan 10, 2013 at 16:29

I think sometimes people are very negative about our industry me included.

New recruits coming into the business will accept it as the norm that they charge fees, that the regulator is constantly on their back and that exams and continuous professional development are part of doing the job and being a profession.

Most of us old timers carry far too much baggage and it weighs us all down me included. We are cynical about the industry and can see nothing good about it.

That is partly because the downside has always been played out and we have never extolled the virtues of what we do. I have paid out numerous claims, seen people into retirement on a good income, given them advice about a wide range of subjects and in many cases saved them from some catastophes.

Let us start the year with our glasses half full rather than half empty. New broom this year!

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Michael Shea

Jan 10, 2013 at 16:53

I like glasses half full. However, let us wait until someone, perhaps one of the new graduate entries, inevitably has to find a new client instead of servicing from an existing client base. 'As I said when Joe Smith referred you to me, it would be great to meet up and let me explain how we can help you. That meeting is free and will take 10 minutes. Then if you want to make use of our services it will only cost you £1,500 for a full review plus plus etc.' Prospect:'What do I get for £1,500?' Adviser:'A 30-page analysis of your circumstances' Prospect:'But I already know my circumstances. £1,500 for you to tell me what I know seems a bit steep ... 'etc etc. What is needed here, I have to say it, is negotiation skills (what some might call 'selling', if you'll pardon my use of the word). Are the graduates getting any negotiation skills training in amongst all of their qualifications? If not, my company would be happy to oblige.

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MJH

Jan 10, 2013 at 20:25

I would love to see a package offering graduates a position - is it a salaried job - how about terms and conditions - the graduate comes with very few contacts, almost certainly no existing clients.

Generous salary circa £45,000 per annum, company car, bonuses, pension, life cover etc -

Most successful IFAs over the past 25 years have been used to earning an income nearer 6 figures. I honestly believe that the ability for a graduate to generate a truly attractive income from our industry under the RDR jurisdiction is going to be almost impossible.

Jeremy I would be interested to see one of your ads re a position as an IFA with your firm.

e'mail michaelhollingdale@btinternet.com

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Eugen

Jan 11, 2013 at 05:59

Gents

I don't think these graduates will start into advisory positions. Giving advice and hunting for new clients are two separate jobs, with very different skill sets.

Firms, ours included, have recognised this long ago and hired people who the whole job is to bring clients in front of the advisers.

As a profession (forget industry) we are completely ineficient, we are still visiting clients in their homes when they should come in our offices, What offices, as half of the advisers don't have one.

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James Bass

Jan 11, 2013 at 09:23

"lecture for the university’s financial services degree students".... I remember you gave a 2 hour guest lecture a year for a module I did last year. I think you are disrespecting the lecturers at the University by this claim

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Michael Shea

Jan 11, 2013 at 09:39

Strangely enough, with technological developments and a trend towards client-centric marketing, having an office that is more than an administration hub might come to be considered old-fashioned and inefficient. On the difference between the skill sets required for advice and hunting, I would say that advice is knowledge based rather than skill based whereas negotiation and hunting are products of skills and attitudes.

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rumnian

Jan 11, 2013 at 14:27

I'm now a tied consultant for a life office, having been a broker dealing with IFA's for 8 years. I've looked at many position IFA firms are looking at and none of these seem very attractive eg No clients, No salary, No help with leads! So to leave a salary for that would be crazy.

I constantly get retarded recruitment consultants calling and asking me to be brave.I doubt very much these 21 year old graduates will start advising as they will be made to answer the phone and make tea. I find the industry pretty bleak already as a 31 year old qualified person so god knows what will happen to these guys right now.

The latest fad from these genuis recruitment people is ringing and asking if you want to provide investment advice in places like Ghana, maybe thats the future chaps!

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