Rethinking The Career Path For Young Advisers

Two recent unconnected events highlighted the mess we are in as an industry when it comes to bringing on young talent.

Firstly I received two CVs from a recruiter. Both candidates had small client banks. Neither was someone we wanted to interview or find more about. The reasons why should be of interest to all young advisers.

The line that stood out to me was that they were seeking a ‘self employed role that can help with leads’. These two young men were clearly looking to build their own client banks. In which case, why would a firm want to hire them?

I want employees who will help build our practice, make it stronger and share in the rewards, not just seek to feather their own nest. You want me to find you clients so you can take them away one day? No thanks!

How have we got to this situation where young advisers think that this is their only option for a career? Here’s my first tip for young advisers: If you want to set up your own business, do so. If you want to commit to a practice, do so. But don’t come with a ‘my client’ mentality and expect someone to pay you a salary while you build up your own thing. That model is broken.

The second event was a video of us recorded by a local company, funded by the council, to help school leavers consider financial planning as a potential profession. There was mention of potential earnings. At the top end (and let’s be honest, we all only really look at the top end!) it was pretty eye watering. This reminded me of the game that many employers play when recruiting of ‘On Target Earnings’ (OTE).

I’ve interviewed many advisers over the years. I would estimate that 90% of the answers to the question “Why did you leave your last role” have been “Because the job didn’t turn out to be all that was promised.” On further questioning, it turns out that the promises of high On Target Earnings and an endless stream of high net worth clients were overstated.

So here is my second piece of advice to young advisers: stop believing the bullshit!

Put these two together and I suspect you have the experience of many, many people in our industry. Went for a job seeking to build their own client bank; Promised lots of leads by the employer; Leads not forthcoming; Forced to find their own clients, with varying degrees of success; Leave after a few years and try and take the clients with them; Get into a argument with the employer about who owns the clients.

It doesn’t have to be this way. I hear constantly from young advisers that there are very few real jobs out there, it’s all self employed.

So here is a plea. First to advisers: don’t take those positions. Leave employers who only offer self employed roles without candidates.

And employers: hire good young staff and integrate them into the business. Build you own succession plan by bringing on talent. Don’t just see advisers as a way of getting a few extra clients.

Of course, there are some for whom a self employed role works well. But, if the calls I get from young advisers are anything to go by, there are far more advisers who would love to work in a practice that genuinely wants to encourage young talent.

If the interests of the business owners and the next generation are aligned, surely this will be for the mutual benefit of both.

Chris is MD of Ovation Finance, who are currently looking to recruit a paraplanner. On an employed basis. 

5 Comments
  1. Paul Gorman 5 months ago

    Chris, this comment was left on the LinkedIn Group page by Gillian Cardy:

    Hmm – quite agree, but one of the three top jobs on Financial Planning Today reads: “Ideally, someone who has a book of business to bring across with them – £5m FUM. However, they would consider applicants who do not have a book of business if they are the “hunter” sales character type.”
    This is not unusual in the scanning of adviser / planner opportunities available (though few mention the 1980s-style ‘hunter’ word – yuk).
    So, if we want to be clear that the clients belong to the practice and are not to be taken with the adviser when he or she leaves, then it must be equally unacceptable for a practice to advertise for a position inviting people to bring clients / assets / FUM with them? You simply can’t acquire an adviser with an existing book of business without taking those clients from another adviser. Which means that firms need to be as realistic as their new recruits!!

    • Author
      Chris Budd 5 months ago

      Very true Gill. As Adam and Jess have pointed out, a proper business at least, and succession plan at best, should be in place so that advisers are clear what sort of firm they are joining, and are therefore able to make an informed decision

  2. Jess Wood 5 months ago

    Great article Chris. Personally I try and steer away from working on roles that are offered as ‘self-employed’ – what does this even really mean? The whole thing is at cross-purposes and absolutely does encourage the ‘my client’ mentality.

    A company takes someone on a self-employed arrangement yet they still expect them to act like an ‘employee’, tow the company line, promote the company’s values and proposition – after all the person’s business card still has Company X all over it. Really it’s just down to the way the person’s remunerated, often it can be a bit more tax efficient on both sides. However, what it then creates is the person thinking “I’m self-employed, I can do what I like, and they’re my clients so I can take them with me” etc…

    In my opinion they’re not truly self-employed; it’s not their business, they don’t run it, have any equity/share ownership or say on the day to day running of the firm – they just work there.
    This then results in the company potentially creating a rod for their own back; difficulty managing the advisers who have the mentality ‘I’m self-employed, I can do what I like’, and little overall loyalty & commitment to the firm they work for.

    If new advisers aren’t offered anything better than just a self-employed position with a few leads chucked in then they’re just going to be all about building their ‘own’ client-base and not the company’s. As Adam has stated in his comments on AL, there does need to be a better way to bring new advisers into a business with proper succession planning in place that benefits all parties involved.

  3. Adam Carolan 5 months ago

    Interesting Blog Chris. The profession has a huge problem in the making and nobody really seems to be noticing so well done for talking about this issue.

    The foundation of the issue I think is mainly because the majority of good firms in the past have created lifestyle businesses, to feed the founders and owners rather than the employees. Most founder and owners will argue about the value of their risk, but that isn’t a younger planner’s issue. If they are good at their job, they will expect to get paid well and if they aren’t, the good ones will find a way to make it happen (i.e. set up on their own). That leaves a small talent pool for those that don’t pay well and either share in the growth plans or make them part of the equity of the companies.

    I hear the word Succession plans mentioned but I don’t see it happening in the market. I see consolidators snapping up firms that haven’t prepared every day now and this doesn’t look like slowing down. For a younger planner with no equity or say, this is a very real issue as the business you are in can be bought and the direction can be changed almost overnight so if you don’t have client relationships or a way to make money, where does that leave you? Less valuable I would imagine.

    I am actually coming to the opinion that younger planners should not join firms without proper business plans and a commitment from the owners and the founders to reward and share in the growth.

    I agree about the self employed vs employed debate, but this requires firms within our profession to commit to growing profitable firms rather than lifestyle businesses. At the moment, this isn’t really happening in what we would call the real financial planning space but Im hoping that will change with a newer breed of business owners. I think we will also see more mergers in the future.

  4. Ian Else 5 months ago

    In my experience it is rarely the planner that requests a “self-employed role with leads supplied”. The majority of recruitment consultants, rightly or wrongly, believe self-employed roles are more previlant in the industry. They take the line of least resistance and encourage the candidate to think about self-employed. I think it’s wrong to blame the candidates, it’s an issue with lazy recruiters.

    I also know there are plenty of opportunities to earn those high OTEs. It’s possible with at least three of he big nationals I could name. It all depends on what you are prepared to do in order to achieve those targets. But achievable they are if you’re prepared to work your socks off and have an old fashioned charging structure.

    I believe those salaries will rise too, Paraplanners, the good ones, are demanding big money. I think a lack of quality advisers will have a similar impact on their earning potential.

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