As our industry recognises that distribution is a vital factor in its success or failure, the need is even greater to develop the next generation of trusted professional advisers if the sector is to meet even a proportion of its market potential.
This industry has shrunk from a high of more than 250,000 financial advisers, to more like 50,000 now. This drop has not been caused by the flight from advice that industry-watchers predicted - perhaps even hoped. It was caused by the number of advisers - tied and independent - who quit the industry when they found its radically changing nature too onerous. In this 200th anniversary of Darwin's birth, it is truly the most resilient and resourceful Advisers that not just survive, but thrive.
If we take into account IFAs, alongside the banks and life companies and their stated ambitions to service their tens of millions of clients more fully, then even a return to a quarter of a million advisers, tied and independent, may not be enough to meet a growing need.
Financial advisers need a new deal. In the good but dark old days, tied salesforces were expanded by throwing new recruits into a tough cold-calling environment and seeing whether they sank or swam; sophistication in recruitment meant poaching entire teams from other companies. Distribution businesses considered themselves lucky if ten per cent made it. Meanwhile the IFA sector was being fed by tied advisers who wanted to run their own businesses and to offer independent advice - even keeping a foot in both camps by running separate businesses.
But the change needed is not just by today's advisers - their numbers need to be boosted by a new generation, with different expectations of the role and its prospects. This requires a much more structured approach to selection and training, as well as a more efficient system of sales management. And before anyone asks where the money is coming from, I would suggest that the successful use of this better business model will be a lot less costly than the hit or miss approaches of the past with their consequent, breathtakingly damaging attrition.
The source will be a more scientific search for people not already in financial sales. Some of these people will come from other roles in the industry. Estate agents, mortgage brokers and financial company admin staff are already recognised sources of new blood. I am also confident that, with a better, more structured approach, we will become more successful at recruiting younger people, at an earlier stage in the career ladder.
The role of the senior practitioner will be pivotal in seeing through this change. Whether they be sales managers or owner/managers of smaller practices, they will take on a mentoring role as new advisers grow into the business. This is already happening to an extent, with the development of para-planners into fully-fledged financial advisers. It is an area where many IFA practices have shown skill and flair, partly because the model works well for them. In the larger tied salesforces, such as banks and life companies, management will also have to evolve in this way. For this to become reality, the significant change won't just be with advisers - who in their Darwinian way will either change or quit - but by those managing distribution. Sales Management - contemporary, fleet of foot, unencumbered by the past - will become a significant brand differentiation.
Advisers, businesses and clients will all benefit, while we already know that regulators, consumerists and politicians will approve.
Bob Gill is chief executive and founder of The Financial Advice Academy
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