To say there have be changes in the financial services market place over the past 10 years is an und...
To say there have be changes in the financial services market place over the past 10 years is an understatement. Consolidation, technology and regulation have been the bywords of the sector, with many venerable names disappearing from the sector and new players entering the fray offering a new raft of services and upsetting the status quo.
And yet the actual process of recruitment and training has undergone very little change. Emphasis has shifted more to quality rather than quantity.
Nevertheless, looking over the several hundred placements made over the years it is amazing to see the same companies names pop up.
At the start of the millennium product providers and distributors of products face three main challenges: technology, demographics and regulation.
Even with advent of the internet and the call centre it is amazing to see how the number of people working in the financial services sector has remained more or less static, despite considerable increases in revenue. Part of this has been due to new players mopping up the staff discarded by others. The most crucial aspect, however, has been the increased expectation of customers in terms of the level of service offered to them. Focus on customer service is seen to be as crucial as delivering the right product.
Demographics and financial service provision will become more important as new tranches of wealth enter the market over the next 10 years.
The increase in home ownership and equity release that comes with it is only one of the aspects that will take wealth of 4 million high net worth individuals from £40 billion to £68 billion over the next 10 years.
All those people will need advice and the internet will not be the panacea. So one might think that IFAs will be able to cash in. As in Evelyn Waugh's Scoop "Up to a point Lord Copper". The average age of IFAs and direct sales managers is at it's highest for a generation. It is creeping up to 50. In 10 years time, unless something radical is done, it is quite likely that the dearth of competent financial advisors could impact on the industry in a cataclysmic fashion.
Some would say regulation is the bane of the industry. If you think it's bad at the moment just look at some of the aspects that are lurking behind consultation papers coming from the FSA, such as CP34, which could insist that not only distribution staff but also back office staff have a level of mandatory competence.
Imagine FPC, QPA or IAQ qualifications having to be sat and passed by over 300,000 people.
So what is the industry going to do about this? Probably deliver a half-baked response, which will erode competitiveness and increase expense.
However the recruitment industry can help the providers by anticipating this crisis and evolving the service that it offers. Recruitment is often seen as an expensive but necessary evil with an uncertain outcome.
Far from the industry rubbing its hands with glee about the 60,000 new vacancies that might come on the market, its concern as recruitment professionals should be how to deliver this need in a cost effective way that makes both the clients and the industry money without damaging the infrastructure of the financial services industry.
It is the belief of many industry professionals that a new model for recruitment and training has to be delivered to the financial services sector. The 'quick fix' approach has little relevance. The sooner recruitment professionals and clients see recruitment and training as two sides of the same coin the better.
Terms of business are being modified to reflect time undertaken in the recruitment process and in the case of sales professionals fees reflect not only the quality of the new recruit but also their success with their new employer.
Advice on complex organisational issues is now given as part of the recruitment package because again, like policyholders, clients expect a higher quality of service.
Reflecting back on 10 years in the financial services recruitment industry, it is fascinating to see how the basics haven't changed, possibly because it is lightly regulated.
However human capital is now seen as one of the most important commodities in a business. Unless recruitment professional and clients recognise this then the same merry go round will go on for the next 10 years.
The future will bring with it a number challenges. Without doubt the landscape is going to change beyond recognition, and unless recruitment advisers understand and adapt to the changes the industry will be consigned to the dustbin of history.
Paul Spencer, the Northern Recruitment Group
Industry Voice: Scottish Widows pension expert Robert Cochran and economist Andrew Scott discuss the future of employment and income, in episode three of Scottish Widows' podcast series.
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