What shape is the financial services industry in?
Here we take a brief look at the current state of the financial services industry and how things could pan out over the next few years.
It was recently reported1 that the average age of an adviser is currently mid-50’s and with nearly 7000 advisers expected to retire within the next five years, it is estimated that only around 18,000 advisers will still be working in ten years from now.
People wanting advice will tend to seek the help of advisers that are a similar age to them. With an ageing population, the demand for financial advice has never been greater and advisers who are themselves approaching retirement, are in a great place to understand the needs of clients in a similar position.
The same can also work in favour of young advisers entering the market – young people will normally seek advice from younger advisers. The industry needs to address two challenges – how do we encourage new blood into the industry and how can we encourage younger people to become clients earlier?
The IFA community needs to focus on where this fresh adviser talent is going to come from and understand that there is a need for technology-savvy advisers to service Millennials and Generation Z. Both Millennials and Generation Z are distinct groups with differing attitudes towards technology, finance and spending that are distinctly different from previous generations.
Many banks have now developed their own training schemes which are encouraging younger, technology-focused advisers to consider financial advice as a career. This could help the IFA sector in the longer term, as the logical career move for advisers starting out in a bank is to progress to a more holistic ‘financial planning’ IFA role.
More universities are now offering financial planning courses with industry-specific qualifications, enabling graduates to come out qualified to level four and in some cases, level six. In addition, a number of firms have developed inhouse academies or schools, with the intention of training future advisers inhouse.
At Sandringham we are continually reviewing the state of the financial services industry and adapting. If you are interested in learning more about us, or joining Sandringham as an Advising Partner, why not speak to us.
