‘Dwindling number of graduate IFAs a real threat to industry’

The lack of graduates and trainees opting for a career as a financial advisor could pose a serious threat to the industry in the coming decade, according to latest research.

A study of IFAs by Investec Wealth & Investment found that 55 per cent are concerned or very concerned about the trend, with one-third of those who own their firm planning to retire in the next decade.

Head of intermediary services at Investec Mark Stevens said the industry had to find a way to replenish the stock of advisers as more and more were leaving the sector.

According to Investec’s latest research, more than a third (36 per cent) of owner-managers are looking to semi- or fully retire in the next decade. The firm had spoken to 94 intermediaries in October 2016.

The firm also found 55 per cent of advisers were concerned about the sector failing to recruit graduates and trainees.

Mr Stevens said:”The investment and financial planning environment is unlikely to get any easier in the years to come so it is vital that the financial advisory sector works together to replenish the pool of talent and experience it will lose.”

For IFAs the most desired option to overcome the recruitment gap at trainee and graduate level, was to introduce better training and mentoring schemes, followed by building stronger links to universities and colleges.

Offering more placements and internships to those considering a career in financial planning, was also a popular option for IFAs, according to Investec.

The government has already outlined plans to introduce formal standards for apprentices joining the industry.

Mr Stevens added: “Many firms who want to recruit younger staff have historically relied on larger bank or assurance companies to deliver the foundation training required.

“Whilst many advisers are keen to take on graduates and bright school leavers they sadly get overlooked if they do not offer formal graduate schemes and have a much lower profile at universities and colleges compared to other professions.”