It was rumoured that UK chancellor of the exchequer Rishi Sunak would announce an array of changes in his summer statement but it did not quite live up to expectations.
In the mix of talk around stamp duty, VAT and green initiatives, the chancellor did launch a £2bn ($2.51bn, €2.22bn) kickstart scheme to create hundreds of thousands of fully-subsidised jobs for young people.
The policy will pay the wages of 16-24-year olds at risk of unemployment for six months.
Sunak said: “We cannot lose this generation, so today I am announcing a kickstart scheme… to give people the best possible chance of getting on and getting a job.
“I urge every employer, big or small, national or local, to hire as many ‘kickstarters’ as possible.”
Structured career plan
“This looks like a very sensible way to help young people,” Kevin Moore, Chartered Institute for Securities & Investment (CISI) global business development director, said. “The key will be to ensure that the six months is well spent gaining skills for the longer term.”
Keith Richards, chief executive of the Personal Finance Society (PFS), added: “Since financial services is a profession, it is something that requires a structured career plan over several years, so the job creation scheme must be properly integrated with other initiatives such as apprenticeships, to ensure that there is a pathway for young people from their initial experience to achieving a licence to practice as a fully competent professional.
“That said, back office structures have been a vital and growing part of the profession, which offers other opportunities for young people and employers alike.”
Details
A total of £1.6bn will be invested in scaling up employment support schemes, training and apprenticeships to help people looking for a job.
The details of the kickstart scheme include:
- Businesses will be given £2,000 for each new apprentice they hire under the age of 25. This is in addition to the existing £1,000 payment the government already provides for 16-18-year-old apprentices and those aged under 25 with an education, health and care plan;
- A £111m investment to triple the scale of traineeships in 2020-21 ensuring more young people have access to high-quality training;
- Some £17m of funding to triple the number of sector-based work academy placements in 2020-21;
- Nearly £900m to double the number of work coaches to 27,000;
- Over a quarter of a million more young people to benefit from an extra £32m investment in the National Careers Service.
There is no cap on the number of jobs available through the scheme, but businesses must show the jobs are additional roles, at least minimum wage and 25 hours per week.
Employers can apply from next month and young people could be in their roles from this autumn.
Open doors
But, how much will this scheme affect the financial planning sector?
“As an industry, we have talked until we are blue in the face about the advice gap and how we need more advisers coming into the industry, particularly a younger and more diverse cohort,” said Scott Stevens, head of adviser recruitment and acquisition at Quilter. “But it’s not just advisers we need, it’s paraplanners, support staff and many others.
“This government package is an ideal opportunity for the advice industry to put their hands up and say we need more staff and we are happy to get involved. More than just good practice, it will be good for business as this will showcase our profession as one for younger people to consider.
“Plus, we cannot deny that many entrants to the job market will not have heard of financial advice and by opening up our doors to more workers we may in turn find that we inform more people about the value that financial advice can add.”
Nurturing talent
Lewis Greene, managing director of IFA recruitment firm Independent Resourcing Consultancy (IRC), told International Adviser: “I feel the kickstart scheme will really help advisory firms to bring in talent knowing they will have the support from the government.
“We have for many years been writing about IFAs not having the time but more importantly investment to bring through the next generation of financial services professionals, this kickstart scheme will most certainly support just this.
“I can only see this being very welcomed in the IFA space of which many firms will take this up.”
Sam Oakes, marketing and recruitment director at Recruit UK, added: “Young people’s opportunities have been hit massively by covid-19 and the kickstart scheme for companies, especially financial planning firms, is going to be a fantastic opportunity to bring in inexperienced staff and have their salaries subsidised.
“We are not talking about bringing people in to be financial advisers, but without a shadow of a doubt there is going to be an opportunity on the data and administration side.”
