The UK has traditionally been the primary feeder of the international financial advice market, with British IFAs relocating overseas to provide advice to British and western expats.
The retail distribution review in 2013 saw 13,500 UK-based advisers leave the industry, with an estimated 16 million consumers losing access to financial advice, according to the Heath Report.
As the UK advice gap widens there is a question mark over whether the UK can still provide sufficient numbers of new IFAs for the offshore world or if life companies and other product providers need to look at other distribution methods.
Southeast Asia
“I do not think the job of adviser is marketed very well,” said Lewis Greene, head of recruitment for Globaleye.
In southeast Asia, retaining advisers takes precedence over recruiting them, with Globaleye leveraging its local reputation and offering financial incentives to keep existing staff.
Recruitment in Singapore is limited because of the exams that advisers have to pass to qualify, said Greene. “Our recruitment is very focused, with only a certain number of people worth approaching.
“People do enquire about Hong Kong but the cost of living there is very high. There is no upfront commission there so building a book of business from scratch is tough.”
Middle East
This stands in stark contrast to the Middle East, which has seen a substantial rise in the number of advisers in the past 10 years, according to Nigel Sillitoe, chief executive of research firm Insight Discovery.
“Brits are being lured by the bright lights of Dubai’s tax-free environment, though it is expensive to live there,” he said.
Greene agreed: “Dubai markets itself as an attractive place to come and work. We put general adverts out and people enquire – they want to know what it’s like working and living here. We have a very rigorous recruitment process though, and are quite happy to turn people away if we don’t think they are going to be right for our business. ”
Diversity gap
But a lack of diversity is limiting business prospects, according to Philip Cernik, Friends Provident International’s chief marketing officer for the UAE. “British IFAs have tended to focus on their own nationality and we are getting close to a ceiling,” he said.
As a result, they are missing out a big section of the market. “Customers prefer to deal with their own nationality because they feel they better understand their requirements. If the advisory firms want to expand they need to recruit from a wider geographic pool to service the demographic base,” Cernik said.
Companies such as Friends Provident also have a role to play, he said. “We can’t just peddle UK expat stories.”
Adviser academies
FPI set up a financial adviser academy in the UAE last year as a pilot project in a bid to help advisers invest in technical and investment expertise.
“This is going to help advisers break out from their traditional ground,” he said. “The whole point of the academy is to raise professional standards so advisers are more credible, customers get better advice and it improves the general market.”
FPI is not the only company to have launched an academy, with South Africa’s Carrick Wealth, deVere Group, Old Mutual and Prudential among those supporting the continuous development of advisers.
Old Mutual Wealth has invested heavily in the future of financial advice with the acquisition of the Financial Adviser School, Instrinsic and AAM Advisory in Singapore, said Steven Levin, chief executive of investment platforms.
“AAM Advisory runs an adviser academy that attracts graduates primarily from the UK. The two-and-a-half-year programme supports trainees through their regulatory exams, provides product and advice training and mentors them as they become associate financial planners,” he said.
He added that the UK market would continue to provide an important source of professional advisers. “Both the UK and international advice markets offer interesting career opportunities for advisers, and whether they choose to stay or leave the UK once qualified will be a personal decision for them.”
New recruits
For Globaleye’s Greene, it is more about getting the right person who understands customer service. He said: “That is what we look for in new recruits. Clients want service above all, and we can teach them the financial side of the business.
The recruitment process is “not just a half hour interview like it used to be”, Greene said.
Two people able to attest to that are Matthew Nutbrown and Isabel Brookes, who both recently completed the deVere Group graduate programme and are working for deVere in Malta.
Whereas a substantial proportion of current IFAs transitioned into the financial advice sector from a variety of fields, both Nutbrown and Brookes graduated from UK universities with accountancy and finance-related degrees.
“The graduate scheme was very intense,” Brookes said. “It was a lot of hard work but it definitely helped me get to where I am now.”
Nutbrown agreed: “It is an awful lot of hard work, but it is rewarding hard work. It is an industry where you reap what you sow.”
