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Finding the face that fits

How difficult is it to find the right calibre of staff for an adviser business? Dave Burrows sought adviser views and talked about the solutions they employ to ensure they recruit the best person for the job

Recruitment is a major issue for the financial services market at the moment. Some roles, such as paraplanners, are particularly hard to fill.

Alan Smith, managing director of London-based Capital Asset Management (CAM) has for many years used external paraplanners to compile and write reports. Outsourcing is still a useful option but as the business has grown CAM has increased its in-house paraplanning capability and Smith is encouraged by the calibre of young people filling vacancies.

“There are now several universities offering relevant courses and I think the situation is gradually improving with regard to new blood entering the profession. I think it is also an advantage that those young people are entering the profession in a post-RDR world and so are not burdened by the old issues (commission selling) and see their role as highly professional and structured. I am actually quite impressed by their level of knowledge so there are reasons to be positive.”

In contrast, Paul Richardson, managing director of Reigate-based advisers Concept Financial Planning, says it is hard to find quality advisers and admin staff right now. He believes the benefits of more university courses and the demand for higher level qualifications will improve the calibre of financial advisers in the long run but he insists it will take 5-10 years to filter through.

“Expectations of graduates are far too high. They think they are going to walk straight into a job paying £30k- plus. The reality is that their qualifications are just a starting point and they need to clock up another 3-5 years of further training and on a much-reduced salary before they are able to sit in front of a client. I think that in time standards and numbers will improve as financial planning is seen as more of a profession but at the moment I am not overly impressed with many of those I interview. Too often interviewees haven’t done their homework and when asked what do you know about us they are largely blank. They have a pretty poor understanding of what the job is all about.”

Smith at CAM concedes that being based in central London might make it easier to recruit from a large pool of people but he says the flip side is the competition in the capital amongst a large number of IFA firms and the added pressure of competitive salaries.

Using recruitment agencies
In terms of methods of recruitment, Smith is not overly impressed?by recruitment consultancies. ?“We prefer to rely on personal recommendations, word of mouth and job boards. I think recruitment agencies need to shake up their business model. Our experience is that consultancies don’t vet people properly. Their fees are high and yet despite providing a clear job role for a vacancy in our business, (paraplanners, admin support etc) the agencies send along a stream of people for interview that are totally inappropriate.”

Whether using an agency or not, Smith says IFA firms need to clearly define any vacant job role or bad and costly recruitment decisions will follow.

He believes recruitment is better handled outside of the agencies and points out that some agencies contact those they have placed just six months down the line about another position with a rival IFA in an effort to drum up new business. “There is little value from agencies, in many cases recruitment consultants actually use job boards themselves so we just cut out the middle man and the large fees and go direct ourselves.”

Martin Bamford, managing director and chartered financial planner at Surrey-based Informed Choice, takes a similar line and thinks IFA firms rely too much on recruitment agents to fill positions.

“The best way to find candidates in my experience is through word of mouth and local advertising. We have had success in the past through Facebook adverts and posts. What is really important is for the firm to have something special that will attract the right candidates. Prospective employees are interested in much more than simply remuneration these days; additional benefits and quality of the working environment rank right up there with pay.”

The right attitude
Bamford insists recruiting IFA?firms must clearly define roles and responsibilities but also ensure any job candidate fits in with the culture of the company. “It is always important to look for the right attitude, ahead of experience and qualifications. You can train people and help them pass exams, but it?is very hard, if not impossible, to change the wrong attitude.”

His views are echoed by Smith who is a big fan of using psychometric tests as part of the selection process. “We use psychometric tests as we think it is important to look at the character of the applicant and not just focus on their level of knowledge.”

Neil Mumford, managing director of Esher-based Milestone Wealth Management, argues that for the bigger IFA firms there are more resources to pay salaries and train up staff from scratch but for smaller companies the situation is more challenging. “We are currently training up someone at the moment. As he is an intern, we are not paying a salary but we are helping him get through his exams, which hopefully will benefit all.”

What is certainly true is that recruitment is less of a pressure if staff retention levels are healthy and the opportunity to develop skills in-house can often provide an incentive to stay put and develop a career rather than move on.

Simon Lewis, managing director of Surbiton-based Partridge Muir & Warren (PMW) set up the PMW Academy with this in mind, to enable trainee staff to hopefully take on advisory responsibilities in the future.

“We aim to encourage staff to come through the ranks as they build up their qualifications and experience. We see the PMW Academy as an integral part of this process and it is a win-win situation – the individual members benefit through real rather than simulated experience and the company benefits by developing in-house expertise.”

The PMW Academy is, it must be stressed, in addition to the professional qualifications completed by its advisory staff as a matter of course. Those learning the ropes invest real cash (but not clients’ money) across a range of asset classes.

Lewis elaborates: “Because it is a fund management team and performance is the result of a combined effort, the emphasis is on each team member being able to provide an impartial periodic appraisal, good or bad, of the sectors they are responsible for.”

The Academy is an on-going project, so as team members become more proficient and demonstrate a thorough understanding of portfolio management, they begin to advise real clients on asset allocation and are replaced in the Academy by new staff members who in turn develop their portfolio construction skills.

The work of trade bodies
A common perception within the industry is that financial advice?is little known as a career choice. Should trade bodies and the CII be doing more to help the industry attract new blood?

Bamford at Informed Choice believes the CII has done a great job over the years in raising the profile of the profession, particularly for graduates. “I took part in a campaign they ran over a decade ago to encourage new blood into the profession and they have run similar campaigns.”

Smith agrees that the trade bodies have proved effective in incentivising students to enter financial services but that they can always do more. “I think you can always improve the profile of the profession and the trade bodies are in an ideal place to do that. Perhaps they could do more to talk to undergraduates while they are at college and before they enter the workforce.”

Richardson praises the IFP’s efforts to raise the profile of the profession but he says perceptions of high entry salaries often based on recruitment agency hype have not helped matters. “Salary expectations of graduates are just off the scale, they need to understand that as with law and accountancy graduates you have to work your way up through practical experience – there are no short cuts.”

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