Written by Kelly Biggar, head of our Wealth Management desk.

In recent years the financial services industry has undergone a number of changes and upheavals. Many financial planning firms have reacted by cutting costs, and growth strategies have been heavily focused on hiring advisors who can bring assets. Indeed, we have seen the demand for financial advisors with portable books increase greatly. For some firms, one of the casualties of the current climate has been internal programmes aimed at training young advisors, and many of these have been removed as they are perceived not to add a financial value to the company. This is a worrying trend.

In recent years I have met a lot of financial planners, the majority of whom have been in the 35 to 55 age bracket. They have been experienced advisors, with a wealth of knowledge and life experience to offer their clients and their employers. However, there seems to be a shortage of financial advisors in the generation below. Often when I come across candidates in this age group they are disheartened, having been in a paraplanner/trainee advisor role for a number of years with no real progression towards advisor status. They often feel that they have been mis-sold the role (see our article on the psychological contract), and many have moved jobs multiple times in a short time period as a consequence. This is in turn detrimental to their employment chances.

It seems an age gap has begun to open up in the financial planning industry, which is likely to be felt in the next few decades, as the experienced financial advisors near retirement age. My concern is that firms do not invest enough in training and bringing through new talent, though there are some notable exceptions. Companies will have to start thinking about reinvesting in their employees, to take the time to train, mentor and grow, and bring strong individuals through the ranks. Although this is expensive short term, firms would in time benefit from increased staff loyalty, consistency for the clients, and, eventually, financial reward.