It is an understatement to describe the financial services industry as a challenging one.
Over recent years we have all come to cope with the constant change and the increased regulation, and today, of course, mortgage brokers are facing another challenge – a significant downturn in the market.
One side effect is the increased difficulties that advisers have to deal with when considering their career development.
Advisers have a wide variety of companies and locations to choose from, but the structure of the sector and the options available mean that it is almost impossible to compare opportunities.
Flexibility and freedom
Ironically, it is the choice, flexibility and relative freedom which attract many to join and stay in the industry. The opportunity to be self-employed and run your own practice is very appealing, while others prefer to be employed.
Of course, there is no right answer as to which is the best type of company to join – everyone has different needs, desires and goals.
However, I believe that there are certain factors which are common and should be considered by advisers when reviewing their choices within the financial services industry. In broad terms these break down into seven categories: the office, the company, remuneration, client ownership, exit strategy, career development and compliance.Office
To me ‘the office’ encompasses much more than geographical location, it means how and where you work. We all like to operate in different ways. For many advisers, a home office is the preferred option.
It provides flexibility and reduces travel time. Other people want to utilise regional or hot offices where they can benefit from the support of admin staff and adviser colleagues.
Company
Whether you are employed or self-employed, choosing the company carefully is key. Despite the fact that advisers are, in many ways, ‘their own boss’, the host company has a very significant role to play.
Before you sign on the dotted line, ask a few questions: is it local or national? Is it financially secure? Does it have a strong supportive parent with the human and financial resources to support you?
Remuneration and exit strategy
Remuneration is important to us all, but for advisers there are many more factors than just commission rates to consider. A key one is client ownership.
Signing your clients over to your host company to secure a golden hello – that ends up as a debt – or a slightly higher commission rate may be appealing in the short-term, but when you want to retire, you will rue that decision.
My advice to all advisers is, however far away retirement may seem, think hard about your exit strategy.
Career development
I started this article by referring to career development; this has become a short-hand phrase for job change and putting a few more pounds in the bank.
Too few advisers really think about how they are going to develop their careers and align themselves to the Retail Distribution Review.
The increased professionalism of our industry means that there are many paths advisers can follow, along with different levels of qualifications. Decide on how you want to develop your career and choose a company that will support you.
Compliance
While compliance is an area that advisers sometimes find challenging, it is one we can’t avoid. High on the Financial Services Authority’s (FSA) agenda is ‘Treating Customers Fairly’ (TCF).
In a newsletter published last month, the FSA said: “We recently completed a review that found firms are not doing enough to ensure their appointed representatives are treating customers fairly.”
The FSA is soon to assess over 5,000 advisers and around 11,500 firms over the next three years. Advisers need to be sure that their firm has met its TCF obligations.
Advisers spend their lives providing advice to clients; sometimes you need to take a step back and take the advice of others.
