Octopus Investments has said the UK advice gap is set to widen after its research found almost a third (28%) of advisers expect to retire within the next five years.
The firm’s study, which surveyed 205 advisers, also found that, over the course of the next ten years, six-in-10 (58%) advisers expect to retire. According to the investment firm, that proportion is the equivalent of more than 15,000 advisers leaving the profession.
Octopus Investments also found advisers are already worried about engaging talent: just under half (44%) of those surveyed said they had concerns about attracting new advisers to their firm. What is more, two thirds (69%) of advisers also reported they did not have a single adviser employed at their firm under the age of 30.
On the question of finding talent, around half (46%) of those polled said the most significant barrier in recruiting new and younger advisers was the difficulty in finding quality candidates.
The second most referenced obstacle was the lack of existing, structured pathways for students to access the profession.
Of those who said they faced issued with recruiting, two thirds (65%) believed there needed to be more awareness of financial advice and the role it plays in society.
More than a half (58%) said improved financial education in schools would help, while 40% said there needed to be a more “fundamental shift” in the way the advice industry is perceived.
Meanwhile, 1002 university students were also polled on their opinion of the sector and just one-in-10 said they would consider a career as an adviser. Around a third (36%) said they did not know what a financial adviser does.
While Jarrovian Wealth financial planner Farida Hassanali said she was one of the rare people who dreamed of becoming a financial planner at the age of 12, she recognised the struggle the advice sector has in attracted new blood.
“Despite financial services being one of the UK’s largest sectors, financial advice is still a small part of this, which leads to fewer people knowing an adviser growing up,” she said.
“A good place to start would be to ensure career advisers at schools understand the options available, such as the growing number of university courses, apprenticeships and professional qualifications.”
‘Turn the tide’
Octopus Investments CEO Ruth Handcock said society “desperately needs” more advisers. Octopus itself revealed its intent to launch a restricted advice firm at the beginning of 2019.
Handcock said: “The encouraging news is that once people actually understand what it means to be an adviser, a sizeable proportion would consider it as a career.
“This presents a huge opportunity for the industry and demonstrates that if we can work together to champion the profession and raise its profile, we should be able to turn the tide.”
This is reproduced from Professional Adviser; all views are from the publication. This originally appeared online on 8 August 2019.