In the March 2021 UK budget, chancellor Rishi Sunak announced that grants for apprenticeships would increase to £3,000 ($4,173, €3,497) from £1,500, as well as a £126m additional investment in traineeships.
This will help companies bring in young people to their workplace and has been well-received by the financial advice industry.
Ben Griffiths, financial planner at Lewis Brownlee, said: “Any initiative that actively encourages people to find out about and enter the profession can only be a good thing.
“The easier it is financially, to explore and enter the profession, the greater the awareness of the industry will be. As advisers, we believe we should welcome any measure that lends itself to this.”
Helen Blackmore, group human resources director at Succession, said: “Rishi Sunak’s changes will certainly act as an incentive for financial advice companies to consider including more apprenticeships as part of their talent strategies and add to their pipeline of existing talent.”
Usefulness
But apprenticeship schemes are not applicable in every sector.
Sometimes business models are not set up to bring in apprentices; and, where companies can use these schemes, it isn’t always easy to place people in roles of which require a degree of technical ability.
Tim Sargisson, chief executive of Sandringham Financial Partners, said: “We believe it is absolutely vital that, in an industry frequently described as at risk of future skills shortages, we support and encourage new talent into the financial services sector.
“This is particularly the case when we find ourselves at a time where the value of financial advice has never been more apparent. Our strong links with local colleges also offers us a unique opportunity to demonstrate what an excellent career path financial services can provide.”
Nicki Williams, head of employee recruitment and early careers at St James’s Place, added: “There are some excellent apprenticeship frameworks which lend themselves to the advice sector and provide a comprehensive career pathway to becoming an adviser or paraplanner, giving the next generation of advisers an alternative to university as the next step following their A-levels.”
Griffiths added: “The beauty of apprenticeships is that they give on-the-ground, real-time experience of what the job entails. While much can be learnt through the traditional ‘theory-based’ methods, witnessing the job first-hand will invariably give young advisers the added advantage that only work-based training can give.”
Usage
Advice companies should see the benefits of what apprenticeship schemes can bring and set up operations.
Sandringham Financial Partners launched an apprenticeship scheme midway through 2020, and the firm continues to look to attract fresh talent into the financial advice sector this year with its third apprenticeship appointment.
Sargisson added: “Since its implementation, we have seen a significant increase in qualifications across the firm.
“We have tried apprenticeships externally in the past, but it seemed like a natural progression to put in place a more structured apprenticeship route, in order to fully utilise the learning structure already in place.”
David Lawrence, UK chief executive at Kingswood, said: “We don’t take apprentices at the moment, but it’s one of the things we are looking to implement.
“Across our business we have advisory roles, but also functions such as finance, risk and HR. All of these are points where you can start your career, and I think an apprenticeship, in the way that government has constructed now, is a great way to do that.
“Of course, there’s a little bit of an incentive to the employer, but that’s not the reason to do it. I joined Lloyds Banking Group when I was 18 years old on a management training scheme, which was not dissimilar to what you find in today’s apprenticeship schemes in this sector and it really served me well.”
Front vs back office
The big question for apprenticeship schemes in the advice industry is whether they work to bring financial advisers into the sector.
Financial services academies can provide a steady stream of young advisers, which leaves apprenticeship schemes to bolster the number of back office workers.
But, is this really the case?
Lewis Bronwlee’s Griffiths said: “We don’t see any reason why apprenticeships couldn’t be used to help the depleting adviser talent pool. Allowing people the opportunity to experience a profession in real-time can only be a good thing for encouraging people to see whether it is something for them.
“While apprenticeships may start out overseeing back-office roles, progression should always be an option for those who want, and have the desire to, further their career.”
SJP’s Williams said: “Apprenticeships can absolutely provide the necessary foundation and stepping stones for a very successful career as an adviser and we have excellent examples where this is happening.”
Succession’s Blackmore added: “They could help and given the appropriate level of business support, would be an invaluable way of ensuring that a company’s talent pool is ever growing and being nurtured to meet future business growth and needs.
“The skill is in the deployment of the apprenticeship schemes, ensuring that the company focuses on building the environment, desire and capability individuals require to perform in their role and progress successfully through the apprenticeship.”
Encouragement
The recent government changes to apprenticeship schemes are positive, but more can be done, especially in an industry with depleting numbers of advisers.
Griffiths said: “Encourage firms to have their own academies of advisers, where experienced advisers train up the next generation of the firms advisers.”
Williams said: “Taking on an apprentice, especially for smaller business, is a significant commitment both in terms of time, with support and on the job training, and financially.
“The incentive grants go some way to helping businesses bridge that gap but often the grants are eaten up through initial set-up costs of providing technology and equipment and a longer, more sustained contribution towards the salary of apprentices would be a worthwhile consideration.”
Blackmore added: “A stigma still exists that apprenticeships hold a lesser value than traditional academic routes; changing this mindset is difficult and more could be done to remove this stigma and promote the benefits of apprenticeships in all sectors.
“Some flexibility around the requirement for 20% off the job training could also be beneficial as many companies find that they are unable to absorb this loss of productivity unless they are over resourced which reduces their capacity to absorb apprenticeship schemes.”
