A recent survey by CoreData into the impact of the coronavirus pandemic on the UK financial advice profession predicts many advisers will leave. Advisers with 30 years or more experience are particularly pessimistic, with a third (33%) predicting larger coronavirus-related exits than was witnessed as a result of the Retail Distribution Review (RDR).
But as Nicola Watts from Jane Smith Financial Planning highlights in a recent article, is it right to assume that it’s the pandemic that’s pushing advisers to decide whether to stay or go? Advisers with over 30 years’ experience may well have been thinking about retirement anyway.
Generally speaking, the financial advice profession has an older demographic, so we have to assume that many experienced advisers will be preparing to leave in the not too distant future regardless of outside influences.
The pandemic and the challenges that has thrown up in terms of adapting businesses to cope with a more technology-led way of working may have hastened their decision but it’s not the root cause.
If we accept that many older advisers will be planning to exit, what really matters is what’s being done to ensure a thriving profession is left behind.
At PortfolioMetrix we are always keen to champion the younger generation: those who have ambitions to develop their skills and experience to carve out a successful career as financial advisers.
However, it is concerning that when looking to recruit this demographic for the Young Adviser network we are building, we found they are rather thin on the ground. And this is despite our adviser partners being at the progressive end of the spectrum.
Selling the firm
While some firms are actively seeking to bring on the next generation, with succession planning being the catalyst, it’s clear some advisers are pinning their retirement hopes on selling their firms to a third party, expecting their healthy books of business to fund their retirement.
This is all well and good, but there has to be enough advisers left in the profession to be able to take on these existing clients, let alone service the needs of new clients who are looking for advice to help them secure their financial futures.
We also need to see more women choosing the financial advice route. The current demographic is male-dominated – why? Advisers like Nicola Watts, who are focused, client-centric and ambitious for long-term success, are thriving so there needs to be more effort by the industry to engage with women to highlight the rewards a financial advice career can offer.
One thing is clear, if the financial advice profession doesn’t act quickly to get a younger, more diverse demographic on board, the advice gap will continue to widen.