Age discrimination legislation came into force on 1 October 2006. The new law is designed to prevent a candidate’s age from being a barrier to employment by forcing employers to consider applicants based solely on their experience or suitability for a specific opportunity.
This type of legislation can often be seen as nothing more than an official stamp on the good practice that most of us already have in place. However, I believe the new legislation could be very advantageous to the financial services industry – if enforced correctly.
An ageing profession?
As a financial services recruitment consultancy, we have observed the average age of IFAs gradually increasing – we put it in excess of 50 years of age and most people in the industry seem to quote 54 as the average. We anticipate that the average age of mortgage advice specialists will also head towards this level in the next few years. Why?
It is currently difficult to attract new people to a career in regulated financial services and the reasons are obvious:
Why would a graduate opt for a profession that requires endless further qualifications beyond degree level before any serious money can be earned when other professions don’t have such rigorous requirements?
It’s difficult to integrate trainees into an industry that requires results in the short-term.
And then there’s compliance. As compliance increases, so does the need for the supervision of new recruits and, therefore, their cost to the employer.
How will this latest legislation affect employers and candidates? Hopefully it will see an end to discrimination based simply on when you were born. After all, industry knowledge is usually a desirable commodity, and it stands to reason that such experience comes with age. But for all the positive effects the Act may have for older employees, we are also wary of what will happen at the other end of the spectrum. It’s not only people with 30 plus years of experience that will be affected; it will also be individuals with far less experience.
We have often received feedback from prospective employers that they ‘could not envisage’ allowing a 24-year old to undertake a client meeting with a partner or hold discussions at board level. While this is, in our opinion, understandable to an extent, from now on it will not be an acceptable reason for discounting an application. As I said, if properly enforced, the Act should have the effect of enlarging the candidate pool and opportunities generally.
The months ahead will be interesting. In this day and age, I have no doubt there will be legal professionals employed on behalf of employers and candidates alike, dealing with areas of litigation arising from the new Act.
The self-employed?
One particular area of that has never really been affected by any kind of discrimination is the realm of the self-employed adviser. The reason for this is that an adviser who is not taking a basic salary has the benefit of far greater autonomy. The cost of ‘employing’ the adviser is minimal in comparison to someone on a large basic salary. Therefore, the he is left to his own devices.
If the adviser can develop business then it is favourable to all parties – age does not have any bearing on this. In fact, someone who has been advising clients for a number of years in this environment will generally have a loyal client following and – at some stage – will want to lay down his factfind and hand over his clients to someone else. In this instance, you could say there is a benefit in taking on someone nearer their anticipated retirement date. Self-employment is therefore possibly the most flexible way of working and one of the least susceptible to discrimination.
Repercussions
The Act will also have repercussions in the pensions arena. The results from recent enquiries into pensions provision, along with the new Age Discrimination Law point to the fact that our whole outlook on retirement is going to have to change. Individuals may have to reconsider their retirement age and work on a part-time basis to supplement their retirement income. If this is the case, it will have knock-on effects.
And life in general
It will be interesting to see how this Act could affect our everyday lives. Gone will be the days of age limits – lower and higher. So will this mean that licensing laws will change? No more ‘over 25s nights’ at the local bar? Will it mean the ‘18-30’ holiday will be finished? And can it really mean I will be accepted with open arms at the Purley tea dance?
As a company, we hope the impending changes will be an improvement on how we are currently able to work. But the proof of the pudding, as they say, is in the eating, and we will have to see where we are this time next year.
ENDS
