UK financial advice sector ‘urgently needs new blood’

Nick Elvin

Financial advice could become the exclusive domain of the super-wealthy unless more is done now to attract young people into the industry.

That’s the view of Mike Coady, managing director of financial advisory organisation deVere United Kingdom, who says demand for professional, independent, whole-of-market financial advice “continues to skyrocket with no sign of slowing down”.

The strong demand is being fuelled by, among other factors, the recently introduced pension reforms, which have given individuals new freedoms and controls over their retirement incomes; an increase in financial education being offered in workplaces and schools; and an increased awareness of the importance of sound financial advice following the 2008 crash.

“Whilst it is unquestionably positive that ever more people are seeking professional advice to help secure their financial futures, it appears that demand is beginning to exceed supply of independent advisers,” said Coady.

“This is largely due to many advisers exiting the advice market, or opting for a ‘restricted advice’ business model, since the introduction of the Retail Distribution Review (RDR).

“Whilst RDR has driven up industry standards, qualifications and transparency, it has left the number of independent advisers significantly reduced.

“There is also an ageing adviser population, with considerable numbers retiring from the profession each year.”

The sector needs to attract new, young talent sooner rather than later, Coady added, as it takes a considerable amount of time and money to fully and appropriately train independent financial advisers.

“A failure to bring new blood into the industry will leave consumers with a smaller pool of advisers – and, inevitably, this could result in financial advice becoming the exclusive domain of only the super wealthy,” he said.

“Collectively, as an industry, we need to do something now before adviser numbers significantly fall over the next decade.

“We need to extol the virtues of the rewarding career to be had with the dynamic and growing financial advisory sector to the next generation of talented advisers.”