It is perhaps one of the ironies of modern life that, at a time when the need for sound professional financial advice has never been greater there is, at best, a stagnation in the number of advisers available to the public.
In the mortgage market, it seems that there has actually been a fall in the numbers of intermediaries actively working in the market today. This is clearly not the greatest state of affairs to be in if we consider that the market has become much more complicated in recent times and therefore the demand for advice has grown considerably.
Borrowers want a professional to ease them through the various channels open to them and ensure they can access all the products and options available.
The actual number of mortgage intermediaries working across the UK is difficult to pin down. The Financial Services Authority (FSA) does not register by individual advisers and therefore we are reliant on bodies such as the Association of Mortgage Intermediaries (AMI) to give us a ball-park figure of 25,000.
Having said this, there is no evidence or corroboration for the 25,000 figure and one would suggest that the actual number is somewhat less. We do know that mortgage advisers in general are much more likely to be in their 50s rather than their 20s and that a combination of factors have, without doubt, resulted in many advisers leaving the industry.
A growing concern
The overall issue of the shortage of ‘new blood’ entering the mortgage advisory sector has been a growing concern over the last couple of years. Indeed, since regulation many have suggested this is a problem that is only likely to get worse.
Regulation itself has resulted in large numbers of individuals walking away from the mortgage advice sector and, with the average age of advisers more likely to be nearing retirement rather than straight out of university, it seems obvious that further falls in numbers will be likely.
While the ‘new blood shortage’ problem has been recognised, it is difficult to see what is being done at an industry level to find a solution.
There seems to be a distinct lack of interest – and perhaps more importantly, funding – at trade body level to put a programme into place and therefore it will be down to individual firms to meet the shortfall that currently exists.
Of course it is only proper that individual firms fill the vacancies they have but there is also a need for the industry as a whole to promote itself as a career worth entering. It is in this area where our trade bodies should be doing much more.
This could include engaging with schools, colleges and universities as well as wider campaigns to draw attention to the sector and opportunities that are available. It is another irony that in a sales-orientated job, the mortgage industry is not good at selling itself.
It is not seen as a career choice and this may be down to the fact that many people currently working in financial services somehow ‘fall’ into the industry rather than actively choose the sector. Therefore, at some level there needs to be much more of a proactive edge to finding the next generation of advisers.
The nature of the job
Of course, I am not so naive not to be aware that one of the reasons why it is difficult to attract new people to the sector is the nature of the job itself.
Ultimately, the mortgage intermediary position is a sales job and those who may be thinking of entering the sector will be conscious that this will involve meeting sales targets to justify their positions if they are employed.
This does not suit everyone and we should also not forget that the industry is, to some extent, fighting its own perception. While we may not like it, the industry may still carry a certain stigma which goes back to the days when customers were sold inappropriate products and there were some shall we say ‘shady operators’. This still undoubtedly puts a number of potential new recruits off.
Many within the industry have pointed to regulation as one further reason why potential new advisers have yet to make the step into the industry. I’m not sure I buy this argument as it seems to me that unless you’re already in the industry you won’t be aware of this side of the business.
If we are to look at the industry reasons for any shortage then we should consider the choice that faces individual firms as they look for advisers. Firms have to weigh up what they want from an adviser and it is a simple fact that the majority will always look for proven, experienced advisers over new trainees as there is a greater chance of success here.
Fundamentally, new blood requires much more in the way of time, investment and resource to take them to a point where they reach the competent adviser stage.
Firms will ask themselves why they should opt for this method and the resulting cost to the company when it will take time to see a return, if any, on the time and money invested in the individual.
In an industry where margins are tight, the majority of firms are looking for brokers who have a proven track record. However, this should not rule out the possibility of bringing in new blood.
After all, these individuals can be easier to mould and will have no baggage. As long as they have the entrepreneurial skills to go with their enthusiasm then they could be the right option.
Finding suitable recruits
The big question is how does the firm go about finding these individuals? Not every individual is suited to financial services and therefore a number of mortgage firms are ‘hedging their bets’ by establishing academies. These academies take on a number of potential advisers and take them through the qualification process.
The chances are that a number of these trainees will fall by the wayside along the way but the majority will work through the programme providing the firm with the qualified advisers they need.
Obviously, there is a major cost to the firm in establishing an academy. We must also consider that there are no guarantees in taking on a new recruit. Past experience has shown that many new recruits fail early on because they’re unable to meet the pressures of sales targets or making a living as a self-employed adviser
However, PNG does see the benefits in bringing in new advisers to our business and the wider industry. We have opted to work with an already established independent academy structure, The Financial Training Academy (TFTA), offering those who graduate the opportunity to work within the PNG structure either as an appointed representative or a self-employed broker.
By doing this we know that the individuals are committed to mortgage advice and have the necessary skills and talent to have graduated from the academy.
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